This deal will give a competitive advantage to Bayer as well as Monsanto as most of their rivals are moving towards mergers.
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The acquisition signals a greater focus by Bayer on its agriculture business, which now produces farming chemicals, crop supplies, herbicides and pesticides.
The German company aims to create a one-stop shop for seeds, crop chemicals and computer-aided services to farmers. This is the world’s largest all-cash deal on record and is expected to close by the end of 2017. Monsanto directors, who are thought to have been reluctant to engage, were finally forced to accept after the bids gradually ratcheted up to $128 a share.
That was also the idea behind Monsanto’s swoop on Syngenta past year, which the Swiss company fended off, only to agree later to a takeover by China’s state-owned Chem-China. “Bayer shares in our vision of sustainable agriculture and improving the lives of growers and people around the world”.
“Today’s announcement is a testament to everything we’ve achieved and the value that we have created for our stakeholders at Monsanto”, said company CEO Hugh Grant. Monsanto sells seeds for fruits, vegetables, corn, soybeans, cotton and other crops, plus heavily advertised Roundup weed killer.
US antitrust enforcers will look at more than product overlaps, said Moss.
A National Academies of Sciences panel of experts said in May that there is no evidence for this but added that more research is needed.
The deals would leave farmers facing a duopoly in seed (Bayer/Monsanto and Dow) and two big firms in chemicals (Syngenta and Bayer/Monsanto), she said.
Shares of Monsanto India too had surged 6 per cent to Rs 2,728.90 during the day, but later settled 1.72 per cent lower at Rs 2,528 on emergence of profit-booking.
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If successful, the deal, touted as the year’s largest, will make Bayer AG the world’s largest agricultural seed and chemical supplier. Monsanto-Bayer would have 28 percent. “This would be the first major test of the new administration”.
