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The DOJ allows Bayer to acquire Monsanto for $62.5B. The Hustle Wed, Apr 11 Brought to you by Eleven James... experience wrist royalty. Relentless suitor Bayer wins permission to partner with Monsanto in a $62.5B deal The US Justice Department...
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%.
Francisco Partners takes Verifone private for $3.4B
A group of investors headed by private equity firm Francisco Partners has agreed to buy payments technology company Verifone Systems Inc. for around $3.4B.
Founded in 1981, Verifone paved the way for point-of-sale card readers, bringing check books to extinction and becoming a key staple in the payments universe.
But unfortunately, as technology progressed, the widely successful visionary became the symbol for all things going the way of the dinosaur.
The trailblazer is always the first to fall
Verifone has struggled with slumping US sales, and their once-ingenious idea of putting card readers in the back of taxi cabs has all but gone away with the rise of ride-hailing services like Uber and Lyft (they sold their taxi operations for $30m in December).
But, above all, the company has struggled to keep up with newer, sexier competitors like Square that offer better software and more transparent pricing.
It’s been a real landslide
According to CNBC, Verifone’s stock has fallen about 70% from its peak in 2011. Last year, the company reported a net loss of $174m, a HUGE jump from the previous year’s $9m loss.
But, there’s a bright side — a very dim bright side, but a bright side nonetheless -- Verifone shares have skyrocketed more than 50% since the acquisition announcement.
When asked if they used Verifone’s outdated payment technology to make the transaction, a Francisco spokesperson told us to “eat sh*t.”
The EU wants to hang with the big dogs, but their new $2.6B VC fund-fund is small change
Yesterday, the EU announced VentureEU, a new “fund-of-funds program” designed to make the bloc more competitive in the global startup space.
VentureEU will split a $2.6B pot among 6 different European VC firms. So far, the EU has committed $505m of its own budget, but still has to persuade private investors to front the remaining money to hit their goal.
Hopefully they have better luck than European startups…
The initiative aims to close the “fund gap” between Europe and global VC powerhouses like the US and China.
According to VentureBeat, US startups raised 6x more venture capital than European startups in 2016. On average, European VC funds are only a third the size of their American counterparts.
But is $2.6B (divvied 6 ways) really gonna get the job done?
To manufacture NECCO-mania, America’s oldest candymaker turns to the rumor mill
Last month, after the Boston Globe reported the potential closure of the New England Confectionery Company -- the country’s oldest continuously operating candymaker and the producer of the (in)famous NECCO wafer -- America’s sweet tooth began to ache.
In response to the announcement, sales of NECCO’s chalky candy wafers -- which typically get (at best) mixed reviews -- increased by 63% as orders poured in from panicked sugar fiends across the country.
What the heck is a NECCO wafer?
The NECCO brand -- which has made candy since before the Civil War -- is most famous for cranking out 8B Sweethearts in the 6 weeks leading up to Valentine’s Day.
But nostalgic candy junkies have been quicker to hoard the flagship wafer than the Sweetheart. One woman ordered 100 lbs of wafers over the phone, and another offered her Honda Accord to secure some chalky goodness.
Ahh, the ol’ ‘false-scarcity ploy’
By leaking rumors of their own closure, NECCO used the scarcity principle -- which says that scarcity can produce disproportionate demand -- to drum up renewed interest in their company.
While many companies advertise products with the classic ‘limited-time-offer’ to simulate short-term scarcity -- few are bold enough to throw the hail-mary of threatening to discontinue a product forever.
But if their desperately brilliant bid for a buyer succeeds, NECCO’s “Wafer-mania” will join the Great Twinkie Rush of 2012 and the Saga of the McRib in the pantheon of history’s greatest marketing gimmicks.
1. The amount of time and energy a person has to take on additional tasks. 2. The amount of patience a person has for the person requesting additional tasks, dependent on mood. 3. Scientific: Bandwidth (Hz) = physical constraints of time and space (m/s) x amount of f*cks given by a particular team (#$%@).
Manager: Jim, what kind of bandwidth do you have for a new Excel project?
Employee: *Checking Fantasy Baseball scores* One more assignment will literally kill me.
Pro tip: When your boss asks how much bandwidth you have, remember that scratching your nose and picking your nose are 2 separate tasks.
deals deals deals
What’s my buying advice? Never pay full price. EVER. Only yuppies in knock off Brooks Brothers suits pay full price. No offense to you’s. This week, I made a deal with a company that delivers wine to you’s door. I know. Crazy Millennials.