Bayer’s proposed deal to buy Monsanto is the biggest corporate takeover deal so far this year.
Chemical company Bayer is taking over the agricultural giant Monsanto in a merger valued at around $60 billion. The deal, which comes after a long pursuit of GM-crop specialist Monsanto by Bayer, will create the world’s biggest agricultural company if approved by regulators. But some politicians are already complaining that it will create a dangerous monopoly.
The deal plans to fuse Bayer’s prowess in pesticides, ranking among the world’s largest suppliers, with Monsanto’s capabilities in seed genetics and biotechnology, which have allowed it to develop corn, soybeans, cotton and other crops that can survive weed-killing sprays and Chemical company Bayer is taking over the agricultural giant Monsanto in a merger valued at around $60 billion. The deal, which comes after a long pursuit of GM-crop specialist Monsanto by Bayer, will create the world’s biggest agricultural company if approved by regulators. But some politicians are already complaining that it will create a dangerous monopoly.
This proposed merger would allow the German pharmaceutical and chemical conglomerate to inherit Monsanto’s market-leading position in seeds and crop genes. That would tilt Bayer heavily toward agriculture in a long-range bet on high-tech crops to sustain a growing global population. In the near term, the sale of St. Louis-based Monsanto, long a ubiquitous presence in American agriculture, spotlights a sagging U.S. farm economy that shows few signs of rebounding as farmers prepare to reap another in a string of record corn and soybean crops this autumn.
The Bayer-Monsanto union is the latest in the recent wave of consolidation that has been going on for the past 10 months in the crop seeds and pesticides industry, which represents $100 billion global market. Major fertilizer producers and seed makers also have pursued deals. Having laid off thousands of employees and mothballed some research projects, major players regard mergers as a way to cut costs while more deeply integrating the development of new seeds and chemicals.
make natural toxins to repel bugs. The merged company would be the largest supplier by sales of both seeds and pesticides. Nevertheless biotech’s rise in farming has sparked pushback from environmental and consumer groups. While the World Health Organization and the U.S. Food and Drug Administration have vouched for the safety of biotech crops, Monsanto’s success in the field has made it a target for their foes. Consumer concerns about the safety and environmental impact of such crops have helped fuel a burgeoning market for foods made without them.
Bayer’s CEO Werner Baumann said his company, which also develops genetically modified crop seeds, shares Monsanto’s belief that the technology will help feed a global population expected to swell to 9.7 billion by 2050 from about 7.4 billion, according to United Nations projections.
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