German lief science heavyweight Bayer has confirmed negotiations about a possible takeover of crop protection specialist Monsanto. The proposed mega-merger would see Bayer becoming a premier crop solutions and agrochemicals provider…
Leverkusen/Germany – The last month saw numerous rumors about a possible union of giants between Bayer and Monsanto, yet now the German company has confirmed ongoing negotiations. Bayer executives recently met with executives of Monsanto to privately discuss a negotiated acquisition of Monsanto Company. The proposed US 45 $ billion bis would be the biggest acquisition by a German company ever and would put Bayer in the need to raise enormous amounts of capital.
Monsanto, with its specialization in genetically modified crop seeds, has been the subject of many takeover rumours. Also, BASF was seen as a possible buyer for the US company. Only recently, Monsanto itself made the headlines with attempts to take over Syngenta, which were later bought by Chemchina.
The proposed combination would reinforce Bayer as a global innovation-driven Life Science company with leadership positions in its core segments, and would create a leading integrated agriculture business, the company believes. The stock exchanges reaction was a mixed bag with an initial minus 7.9 percent in early tradings on Germany's DAX stock index.
This proposed mega merger is only the latest in a series of takeovers with which companies try to overcome stagnating growths due to saturated markets. Especially agrochemicals are affected by an all-time low for wheat and corn in the US and a slowdown of Brazil’s economy, analysts say.
This takeover is the third mega-fusion of an already turbulent 2016, following the announced Dow-DuPont-mega-merger and the acquisition of Syngenta by Chemichina. This a market environment casts a critical light on a possible takeover of Monsanto, as both US and EU antitrust authorities had previously announced their concerns about further consolidations on the agrochemicals market.