Monsanto and Delta and Pine Land Co. announced yesterday that they have signed a definitive agreement whereby Monsanto will acquire Delta and Pine Land Co. for $1.5 billion in cash. The transaction was unanimously approved by the boards of directors of both companies and is subject to Delta and Pine Land shareowner approval, antitrust clearance, and customary closing conditions.

Under the terms of the agreement, Delta and Pine Land shareowners will receive $42 per share in cash. Monsanto intends to finance the acquisition with a combination of current cash on hand and a debt offering. The acquisition is expected to be accretive to Monsanto’s earnings per share by the second year following closure of the acquisition, and Delta and Pine Land should be a contributor to operating cash in the first year.

The proposed acquisition requires review and approval by the appropriate regulatory authorities, including the U.S. Department of Justice. Because of the required regulatory approvals, no time frame for the closing of the transaction has been announced. As part of the proposed agreement, Monsanto has committed to divest U.S. assets of its Stoneville cottonseed business if required to close the transaction.

“Delta and Pine Land represents an excellent fit for our company as we look to bring value-added traits and high-quality seed to cotton growers around the world,” said Hugh Grant, chairman, president and chief executive officer of Monsanto. “Delta and Pine Land has strong cotton genetics, and we believe Monsanto’s leadership in providing the best cotton traits can improve on this already strong base.”

Tom Jagodinski, president and chief executive officer of Delta and Pine Land, said, “Monsanto is a leading agricultural products company with a strong track record of growing and integrating diversified businesses. Our companies are a natural fit that will provide a complete platform of cutting-edge seed technologies to our global farmer customer base for years to come.”

Delta and Pine Land, Co., and Monsanto, Co., are based, respectively, in Scott, Miss., and St. Louis, Mo.