updated 9/14/2007 11:45:54 AM ET 2007-09-14T15:45:54

The agricultural companies Monsanto and Dow AgroSciences will team up to develop and market a new corn seed more resistant to bugs and weeds, the companies said Friday.

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The cross-licensing agreement is for development of the industry’s first eight-gene stacked combination in corn, dubbed SmartStax. The companies hope to have the product on the market by the end of the decade.

Specific financial details of the deal weren’t disclosed.

“The combination of these trait technologies signals the start of the next generation of products with improved plant protection and yield increases for the farmer,” said Jerome Peribere, president and chief executive of Dow AgroSciences, based in Indianapolis. The company is a subsidiary of Dow Chemical Co.

Monsanto Co., based in St. Louis, currently offers a seed with three traits.

“This agreement allows us to incorporate traits which provide farmers with the most complete yield protection ever available in a single package,” said Robb Fraley, chief technology officer for Monsanto. “It’s a major advancement in corn trait technology that will help farmers maximize yields by getting the absolute best out of today’s high-performing germplasm.”

SmartStax seeds will combine eight herbicide tolerance and insect-protection genes, offering above- and below-ground protection systems already produced by the two companies: Dow’s Herculex products and Monsanto’s YieldGard products for insect control; and Dow’s Liberty Link and Monsanto’s Roundup Ready for weed control.

Dow said the deal is expected to add to its royalty revenue and lead to further growth of its hybrid seed business.

Monsanto also expects SmartStax to expand business opportunities for its seed and traits segment.

In addition to the U.S., the companies plan to offer SmartStax in other countries where they gain approval for the product. They did not specify those additional countries.

The companies said they will cross-license germplasm to their seed brands for a 10-year period to create new hybrid combinations in an effort to increase corn yields.

The agreement puts added pressure on agrochemical companies such as DuPont Co., which owns hybrid seed producer Pioneer Hi-Bred International, and Switzerland’s Syngenta AG.

Last year, chemical maker DuPont said it would cut 1,500 jobs as it restructures its agriculture and nutrition division, putting the $100 million it expects to save into its seeds business as a hedge against its increasingly tough battle with competitor Monsanto.

Sales for Dow AgroSciences are $3.4 billion. Monsanto had 2006 sales of $7.3 billion.

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