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Jumbo merger: takeover of Monsanto by Bayer
by Leo Frühschütz (comments: 0)
The German chemicals corporation Bayer has announced the friendly take-over of its US competitor Monsanto. Bayer is paying Monsanto shareholders US$128 per share - a premium of 44 % on the quoted price. Together with Monsanto's debts that Bayer is taking over, the purchase price comes to US$66bn - nearly €60bn. Monsanto shareholders and the relevant cartel authorities still have to agree the the takeover. Bayer is assuming that the whole transaction will be completed by the end of 2017.
The biggest agro-chemical corporation in the world
The deal will give rise to the biggest agro-chemical corporation in the world. Bayer shareholders are pleased - the share price increased by a good four euros during the day. However, the Coordination gegen BAYER-Gefahren (CBG) regards the takeover as the worst case scenario and speaks of a black day for feeding the world. In the case of pesticides, Bayer and Monsanto together have a market ahshare of around 25 % and approximately 30 % in the case of seed for genetically modified and conventional crops. Regarding genetically modified plants, the two companies, with well beyond 90 %, will have a clear monopoly, the CBG has calculated.
It announced it would use the Monsanto Tribunal that will take place in October in the Hague "to divert its attention from the various Monsanto initiatives and now focus its opposition on Bayer." From the political angle, the CBG expects more than a few cosmetic interventions on the part of the EU competition commission.
Harald Ebner, spokesman for the genetic technology and bio-economy policy of Bündnis 90/Die Grünen in the Bundestag declared: "This mega merger of the agricultural corporations Bayer and Monsanto would mean further monopolies and privatisation of the fundamentals of our lives by, for example, patenting seed, and for this reason it must not be allowed to happen. It can't be in the interest of society."He demanded that the competition authorities examine this deal very carefully.
In Germany the initiative aktion agrar is calling for action.