Hoosier Ag Today by: Gary Truitt
After being rumored for weeks, Bayer announced yesterday it has made an offer to purchase Monsanto. If realized, the combined company would be the world leader in seeds, traits, and crop protection products. Werner Baumann, CEO of Bayer, says the deal is necessary to meet the world food challenges of the future, “We have long respected Monsanto’s business and share their vision to create an integrated business that we believe is capable of generating substantial value for both companies’ shareholders.”
The deal worth over $62 billion has farmers concerned, coming as it does on the heels of the Dow/DuPont merger and Syngenta buyout. Bauman said, however, the new company will be able to provide farmers with better technology and innovation, “We can draw on an R&D platform with capabilities in all relevant technologies and a broad and deep pipeline to deliver better solutions for farmers.”
Yet, some farm groups have expressed concerns about the lack of competition and higher prices which is something Liam Condon, head of the Bayer’s Crop Science Division, says will not be an issue. “Faced with the complex challenge of operating in a resource-constrained world with increasing climate volatility, there is a clear need for more innovative solutions that advance the next generation of farming,” said Condon. “By supporting farmers of all sizes on every continent, the combined business would be positioned as the partner of choice for truly integrated, superior solutions.”
Monsanto has been a lightning rod for anti-biotechnology forces and, as a result, has a less than stellar public image. Baumann says Bayer will help improve that image. He stopped short, however, of saying the Monsanto name could be dropped.
The clear, short-term winners in this deal are the Monsanto stockholders who will being offered a 37% premium if they agree to sell to Bayer. No timetable has been set for the culmination of the deal, as the Monsanto Board of directors has not responded to the Bayer offer.
Under the proposed transaction, the combined business would have its global Seeds & Traits and North American commercial headquarters in St. Louis, Missouri; its global Crop Protection and divisional Crop Science headquarters in Monheim, Germany; and an important presence in Durham, North Carolina, as well as many other locations throughout the U.S. and around the world. Digital Farming for the combined business would be based near San Francisco, California.
The American Farm Bureau and other farm groups will be looking closely at Bayer’s proposed takeover of U.S. agribusiness giant Monsanto for its impact on U.S. farmers. American Farm Bureau Executive Director Dale Moore says Farm Bureau will look closely at Bayer’s proposed purchase of Monsanto which would create an industry giant in antibiotics, GMO crops, and pesticides, “The Justice Department will be looking at this deal with a fine-tooth comb.” AFBF senior economist Bob Young says the agribusiness trend toward more consolidation, based on economic factors, is hard to stop, “It is the economics of the farm economy that is driving this.”
Powered by WPeMatico