French seed group Vilmorin and German peer KWS SAAT signed long-term licensing agreements with Syngenta to use the Swiss chemical group's genetically modified (GMO) corn traits, they said on Thursday.
They will be allowed to market Syngenta's current and future corn (maize) traits on a separate basis or through their joint ventures AgReliant, which sells seeds in North America, and Genective, which aims to develop its own GMO corn traits.
Syngenta will receive a $200 million upfront payment and future royalty and milestone payments pending regulatory approvals.
The deal was announced as the Swiss group posted worse-than-expected third-quarter sales, hit by a weak real in Brazil.
Vilmorin, the listed seed branch of farm cooperative Limagrain, does not market its own GMO technology and has to turn to other producers to obtain GMO traits, which are then integrated into its own products or those of AgReliant.
It has a partnership with U.S. company Monsanto, giving it access to the North American market where more than 90 percent of the corn crop is genetically modified, it said.
"The essential part of the deal is that these traits be integrated in our own genetics to offer specific products," Chief Executive Emmanuel Rougier told Reuters.
The 20-year agreement with Syngenta would focus initially on North America but could extend to other parts of the world, notably Brazil and Argentina, Rougier said.
"Today you cannot exist in the United States, in Canada, in Brazil, in Argentina or in South Africa if you don't have GMO products," Rougier said.
He did not see the European Union, where opposition has been strong to genetically modified crops, as a market for GMO corn in the short or mid-term.
Syngenta withdrew two applications for GMO corn in the EU this month following a re-evaluation of their commercial potential.
Vilmorin said this month it would look at Syngenta's vegetable seeds activities, which the Swiss group plans to sell. (Reporting by Sybille de La Hamaide; editing by Jason Neely)
Originally Published: Reuters