Bayer completes Monsanto acquisition for $63 billion

05 July 20183 min reading
German conglomerate Bayer closed its $63 billion merger with St. Louis-based agribusiness giant Monsanto. The closing sets the stage for the 117-year-old agribusiness brand name “Monsanto” to be dropped by Bayer.NET754IFRVGYRMJBRA7XXFLYYY Germany’s Bayer AG, a specialist in pharmaceuticals and life ciences, closed its $63 billion acquisition of American agrochemistry giant Monsanto Co., emerging from an arduous two-year antitrust review as the biggest seed and agricultural chemicals maker in the world. The German drugmaker had received all required approvals from regulatory authorities, it said in a statement on 7th June. “Bayer will remain the company name. Monsanto will no longer be a company name. The acquired products will retain their brand names and become part of the Bayer portfolio,” it said. Bayer secured initial bridge financing of $57 billion. In order to please regulators, Bayer had to sell its seed and herbicide department to BASF, and Monsanto agreed to retire its brand name.“Today’s closing represents an important milestone toward the vision of creating a leading agricultural company, supporting growers in their efforts to be more productive and sustainable for the benefit of our planet and consumers,” said Hugh Grant, outgoing chairman and CEO of Monsanto. SIZE OF BAYER’S AGRICULTURE BUSINESS TO DOUBLE The St. Louis region will become Bayer’s North American headquarters and retain its presence as a leading hub of biotech research. Bayer’s crop science researchers, for instance, will join Monsanto’s research campus in Chesterfield after moving from their current home in North Carolina. The transaction will double the size of Bayer’s agriculture business and the German company will control 70% of the chemicals and pesticides used by farmers worldwide.The takeover also marks the third in a series of mega-deals in the industry, following Dow Chemical Co.’s merger with DuPont Co. and China National Chemical Corp.’s takeover of Syngenta AG. Monsanto, the largest - though not the only - maker of genetically modified seeds, has been a lightning rod for environmentalists’ opposition to the technology. The U.S. seed maker has also drawn criticism for pursuing its intellectual property rights with farmers, many of which depend on its seeds, more aggressively than its peers.”We aim to deepen our dialogue with society. We will listen to our critics and work together where we find common ground. Agriculture is too important to allow ideological differences to bring progress to a standstill,” Bayer Chief Executive Werner Baumann said in the statement. The companies’ separately listed Indian units, Bayer CropScience Ltd. and Monsanto India Ltd. , will continue to operate independently for the time being, Bayer said in a separate statement. The deal is the first of a trio of major U.S.-German merger deals to cross the finish line at a time of harsh criticism by U.S. President Donald Trump of Germany’s trade surplus with the United States. Deutsche Telekom’s T-Mobile US plans to merge with Sprint for US$26 billion, while industrial gases makers Linde and Praxair are also seeking to combine.
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