This combination with Bayer will deliver just that – an innovation engine that pairs Bayer’s crop protection portfolio with our world-class seeds and traits and digital agriculture tools to help growers overcome the obstacles of tomorrow. To illustrate, American biotechnology giant Monsanto, known for its conventional and genetically modified seed research, unsuccessfully tried to purchase Swiss seed and pesticide giant Syngenta AG.
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Monsanto’s genetically modified crops, its herbicide Roundup and other pesticides “threaten cultural as well as agricultural diversity”, the chefs said in their letter published on the Atabula website.
Bayer will largely rely on borrowed funds to pay for the deal, but says it’s committed to maintaining its current credit rating in the long term. Another possibility is what economists call “winner’s curse”, namely that the victor of an auction or contest or bidding war tends to be the person or institution most optimistic, and in fact overly optimistic, about the value at stake.
“Even a takeover of the size of Monsanto wouldn’t put Bayer in the same position”, Kregel said.
“It will. create an innovation engine for the next generation of farming”, Monsanto CEO Hugh Grant said.
“I’ve been very flexible”, Grant said after the deal was announced on September 14. We see more product overlap between Dow and DuPont and think regulators are more likely to have bigger issues with this deal.
Jim Blome, president and chief executive of Bayer CropScience North America, testified that the Monsanto merger is necessary to help farmers meet the food demand created by a rising population.
Environmentalists have campaigned against the deal since talks were first disclosed in May, with celebrities such as Mark Ruffalo and Bianca Jagger tweeting in opposition. Farmers worry that less competition in the marketplace will give the merged companies an ability to increase prices of seeds and chemicals-something that would be particularly harmful during a time when U.S. farm incomes are dropping.
That’s partly because the Monsanto transaction will probably face a lengthy antitrust review by regulators in the USA and Europe. If that becomes a consideration for USA and European Union regulators, it will amount to a worrisome politicisation of antitrust policy.
German chemicals giant Bayer AG has confirmed its US$66bn acquisition of USA cotton seed firm Monsanto in a deal under which Bayer will acquire the cotton seed producer for $128 per share in an all-cash transaction. Syngenta AG, in turn, faced a surprise bid from China and was eventually bought by Chinese state-owned giant chemical company ChemChina with a record fee of around $43 billion.
Bayer and Monsanto have said they expect their deal to close by the end of 2017.
The Leverkusen, Germany-based group said it expects peak sales of more than €5 billion a year for stroke prevention medicine Xarelto, up from its previous forecast of €3.5 billion and €2.5 billion a year from eye medicine Eylea, up from €1.5 billion.
Bayer is no stranger to controversy.
Collins said the complimentary product lines will enable the companies to bring more innovation and choice to its customers.
According to Marc Tuengler, chief of DSW, a German association that advises small investors on proxy votes, the Monsanto deal gives Bayer the opportunity to redeem a tarnished brand and highlight the benefits of the company’s products.
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“With the right signals, the right decisions, Bayer can show what will be changed”, Tuengler said.
