Bayer Bid for Monsanto in the Offing?
As the mind-bending who-with-whom speculation continues to play out in the international agrochemicals sector, the latest version – according to the news agency Bloomberg – has Germany’s Bayer seriously considering a potential bid for US seeds giant Monsanto. Such a deal, should it go through, without major divestments, would create the world’s largest supplier of seeds and agricultural chemicals.
Only weeks ago, market talk had it that Monsanto had made a $30 billion offer to buy all of Bayer CropScience. BASF also has been rumored in talks with Monsanto and, should Bayer move on the US group, the other German giant could be expected to make a counter-bid.
Although analysts point out that Bayer’s and Monsanto’s respective portfolios have little overlap, in view of the current unprecedented wave of consolidation in the agricultural chemicals sector, antitrust authorities could be expected to take a closer look – not least because of the size of the potential merged business.
Bloomberg’s sources say Bayer has held preliminary discussions internally and with advisers about buying Monsanto, which has a market value of about $43 billion, and that Bayer has also discussed financing.
Recently, Monsanto’s CEO, Hugh Grant, told journalists the company no longer sees “large scale” M&A as a viable strategy. Other reports quote the US behemoth as saying it sees itself more of a buyer than a seller.
Market watchers say that yet another potential “get-together” in the agrochemicals sector could overtax competition authorities who already are investigating the planned $130 billion merger between Dow Chemical and DuPont. In the US, the Senate Committee on Foreign Investment is scrutinizing China National Chemical Corp.’s bid to acquire Syngenta AG of Switzerland for $43 billion on grounds of national security.
