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ST. LOUIS - The world's biggest seed company is using an old piece of countryside wisdom: "If you can't beat 'em, join 'em."

After years of litigation, Monsanto Co. announced Wednesday it reached an agreement with competitor Dow Chemical Co. that will allow the companies to share patented technology for developing genetically altered crops.

St. Louis-based Monsanto is by far the industry leader in the multibillion-dollar market for biotech crops, having released the first strains 10 years ago. A key source of profit is Monsanto's patented genes, which allow it to charge fees and premium prices for seed.

The deal allows Monsanto and Dow's subsidiary, Dow AgroSciences LLC, to share patented genes in different strains of corn, soybeans and cotton . Adding multiple engineered genes into a seed is called "stacking" in the industry and produces plants with a number of traits, such as pest and herbicide resistance.

Under the new agreement, Dow will have access to Monsanto's Roundup Ready genes that make corn resistant to the popular herbicide. Monsanto will have access to Dow's Herculex genes for pest resistance.

The companies didn't release financial terms of the deal, which also included an agreement to end litigation over the patented "Bt" gene that makes corn resistant to insects.

The deal could help end the historical pattern of Monsanto and Midland, Mich.-based Dow suing each other, said analyst Frank Mitsch with Fulcrum Research in New York.

"Not only do the companies avoid costly legal fees going forward, but each gains access to new technologies that provide financial benefits," Mitsch wrote in a report on the deal.

On the losing end of this agreement is Pioneer Hi-Bred, one of Monsanto's biggest competitors, Mitsch said. A division of Wilmington, Del-based chemical giant DuPont Co., Pioneer is the second-biggest biotech crop company after Monsanto, he said.

The new agreement will increase competition for Pioneer, which has ramped up efforts to take market share from Monsanto over the last few years, Mitsch said.

At Monsanto's annual shareholder's meeting Tuesday, Chief Executive Officer Hugh Grant was asked about litigation with Dow over patents. Grant hinted that the companies could achieve more through cooperation.

Grant compared the biotech crop market to making television sets. In that industry, a single television contains pieces that are patented by a number of companies. It's how the TV is put together that gives it value, he said.

Monsanto's goal is anything but modest when it comes to selling biotech seed. Monsanto already dominates the market for genetically engineered soybeans, and the agreement with Dow will help it make inroads in the corn market.

Monsanto-patented genes are now planted on about 24 million acres of U.S. cropland, company spokesman Lee Quarles said.

Grant said Tuesday the company wants to expand that to 50 million acres by 2008 or 2009, which would account for about 63 percent of all corn acreage.

Shares of Dow closed down 33 cents at $42.28 in trading Wednesday on the New York Stock Exchange, where it has traded in a 52-week range of $40.18 to $56.75. Shares of Monsanto closed down $1.11 at $79.24. Monsanto shares have traded in a 52-week range of $50.42 to $81.90.

Monsanto Co.: http://www.monsanto.com/monsanto/layout/default.asp

Dow Chemical Co.: http://www.dow.com/

Dupont Co.: http://www2.dupont.com/DuPont_Home/en_US/

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