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, 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.
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.
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%.