Novozymes and Monsanto Co. today announce a long-term strategic alliance to transform research and commercialization of sustainable microbial products that will provide a new platform of solutions for growers around the world.
The BioAg Alliance will allow the companies to leverage employees, technologies and commercial assets in the companies’ agricultural biologicals portfolios. The BioAg Alliance is unique in the industry, bringing together Novozymes’ commercial BioAg operations and capabilities within microbial discovery, development and production, with Monsanto’s microbial discovery, advanced biology, field testing and commercial capabilities.
The result will be a comprehensive research, development and commercial collaboration to help farmers globally meet the challenge of producing more with less in a sustainable way — for the benefit of agriculture, consumers, the environment and society at large.
Sustainable Biological Solutions In Agriculture
Microbial solutions are a significant part of the agricultural biologicals industry, which today represents roughly $2.3 billion in annual sales and has posted mid-teens sales growth each of the last several years. Microbial-based solutions are derived from various naturally occurring microorganisms, such as bacteria and fungi. They can protect crops from pests and diseases and enhance plant productivity and fertility. With faster development cycles compared to other agricultural innovations, as well as broad geographic and crop applicability, microbial solutions offer potential to deliver sustainable, cost-effective solutions that can increase yield using less input.
The emerging agricultural biological technologies complement the integrated systems approach that is necessary in modern agriculture, bringing together breeding, biotechnology and agronomic practices to improve and protect crop yields.
The BioAg Alliance
In bringing together Novozymes’ and Monsanto’s capabilities, the companies are poised to deliver a new category of more effective microbial solutions for global broad-acre crops, fruit and vegetables. Under the collaboration:
- Monsanto and Novozymes will maintain independent and complementary internal and external discovery research programs to identify microbial targets with the potential to help farmers.
- Novozymes will be responsible for production and supply of the microbial solutions to Monsanto, building on its expertise within fermentation. Monsanto will serve as the lead for field testing, registration and commercialization of all alliance products.
- The companies will co-manage the alliance and co-fund research and development efforts.
- Monsanto will pay Novozymes an aggregate upfront payment of $300 million net in recognition of Novozymes’ ongoing business and microbial capabilities, and for Novozymes to supply alliance products.
- Marketing responsibility for Novozymes’ current product portfolio in agricultural biologicals will be transferred to Monsanto along with much of the Novozymes commercial organization currently responsible for that work. The two companies will work to ensure that existing customer relationships and know-how are maintained and further built on for short- and long-term success.
- Both companies will benefit from profits on commercialized products resulting from this alliance and those products brought into the alliance by the parties. Through the alliance, the companies will also test and sell commercial microbial products purchased from other suppliers to bring additional value to farmers.
The agreement is subject to the approval of the relevant national antitrust authorities to the extent required. The alliance is expected to close in early 2014. Further terms of the alliance were not disclosed.