Relentless suitor Bayer wins permission to partner with Monsanto in a $62.5B deal
The US Justice Department finally gave its blessing for pesticide-peddler Bayer to take seed-slinger Monsanto’s hand in merger. By overcoming a final DOJ antitrust review (1 month after similar EU scrutiny), Bayer has scored the deal of their dreams — and history’s largest cash buyout.
Reps from both companies argue that data-driven chemical agriculture will help feed 10B people by 2050 — but farmers and regulators think control of 77% of global seed corn (and majorities in cotton, soybean and canola) is more likely to feed Bayer’s bottom line than a growing population.
Bayer planted the seeds for a long courtship
Bayer, a pharma-behemoth that produces pesticides, first made a $66B pass at Monsanto in May 2016 — and continued pursuing the American seed-starlet with the unsettling persistence of a rom-com protagonist.
Meanwhile, critics cited concerns that the merger would disadvantage small farmers, increase reliance on chemical farming, and encourage price manipulation.
But Bayer promised it would change
To make good, Bayer sold $7B worth of their crop-science business to European rival BASF — proving they were interested only in Monsanto’s seed and forcing an initially skeptical EU to accept the deal.
Despite concerns about stiff opposition in the US — where genetically modified seeds are more prevalent — Bayer-Monsanto charmed their way past the DOJ by promising to sell off additional seed assets to BASF, according to WSJ sources.
They’re the newest power couple on the scene…
But they’re not the only hot agro-pharma romance. Last year, emboldened by desperation-inducing farming margins, Dow Chemical put a $122B ring on DuPont Co.’s ag division, and China National Chemical Corp. swept Swiss seed-company Syngenta off their feet for $43B.
Farmers were worried after the deal was announced Monday, but investors signaled approval — boosting Bayer’s shares 4.7% and Monsanto’s 6.2%.