The Bayer Monsanto merger is almost complete. Bayer AG, the huge German chemicals company, has just swallowed up Monsanto, the Missouri-based multinational agrochemical and agricultural biotechnology corporation. Bayer paid $66 billion for the American seeds company. This is the biggest ever cash deal on record.
This is the third bid that Bayer had made, increasing its offer each time. There had to be a time when the Monsanto board could not resist the offer on the table, and that time came Wednesday with the world’s largest ever cash deal for one company buying another. The purchase creates a massive corporation involved in a wide range of chemicals including pharmaceuticals, health products, pesticides and a whole range of chemicals including dyestuffs and pigments.
The deal involves Bayer paying Monsanto $128 per share. This values the German company at $56 billion. The $66 billion figure comes from an addition $10 billion debt from Monsanto. However, the takeover is not 100% certain to be completed. It depends a great deal on regulators, including monopoly and antitrust regulators worldwide. If the transaction is disallowed, then Bayer will pay Monsanto $2 billion.
A previous deal between similar companies, the Dow and DuPont merger, is still being investigated by European antitrust regulators. This is a planned tie-up between the two costing $130 billion. It is still not certain that the deal will be permitted to go through. If this fails, then the Bayer-Monsanto alliance will be under even more scrutiny.
Bayer will benefit from Monsanto’s American presence. Bayer itself is very strong in Europe and Asia, and its additional dominance in the American market might be worrying to regulators. The latest merger in that area to be approved in the USA was the ChemChina takeover of Syngenta in August. This deal still has a few antitrust hurdles to clear worldwide before it has received global approval.
In fact, prior to the Bayer-Monsanto deal, the ChemChina-Syngenta agreement was the largest in the world to date. Previous to this, Monsanto itself had attempted to purchase Syngenta. It dropped a
$46 billion bid in August 2015 after chasing Syngenta for four months.
This left Monsanto all alone in the agrochemicals mating game, and it finally had to succumb to Bayer. The combined Bayer Monsanto merger can now attack the huge American farm supplies market with a full inventory of products to offer.
Pvt. Ltd.
