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Bayer confirms merger talks with Monsanto

Bayer confirms merger talks with Monsanto

Postby smix » Thu May 19, 2016 9:51 am

Bayer confirms merger talks with Monsanto
Deutsche Welle

URL: http://www.dw.com/en/bayer-confirms-mer ... a-19267210
Category: Business
Published: May 19, 2016

Description: A merger of the world's biggest producers of seeds and pesticides may soon be in the making. Missouri-based Monsanto confirmed reports that it received a bid from Germany's biggest drugs and chemicals firm Bayer. US seed and pesticide giant Monsanto said Wednesday it had received a proposal from Bayer which was "unsolicited, non-binding," but nevertheless reviewed by the company for "due diligence, regulatory approvals and other conditions." While the US company was assessing the offer, it said there was "no assurance" that any transaction would be "entered into or consummated." Bayer released its own statement on Thursday, briefly confirming that its executives had met with counterparts in their acquisition target to "privately discuss" a merger. Neither statement specified a price tag for the deal. But a bid to acquire Monsanto, which has a market capitalization of $42 billion (37.4 billion euros), is likely to be worth more than ChemChina's February deal to take over Swiss agrichemicals giant Syngenta for $43 billion. Monsanto itself tried to buy Syngenta last year. The scale of a Bayer-Monsanto merger could face resistance from antitrust regulators. Agricultural suppliers like Monsanto have been hit by low commodity prices, causing farmers to cut down on supply orders. The strong US dollar has also made the company's products more expensive overseas. The end of the first quarter saw Monsanto cut its earnings forecast for 2016. Leverkusen-based Bayer AG, which specializes in health care and agriculture, employs some 117,000 people worldwide and had sales last year of 46.3 billion euros ($52.22 billion). The German company, whose farm business produces seeds as well as compounds to kill weeds, bugs and fungus, said the proposed acquisition would help it "create a leading integrated agriculture business." But the news sent Bayer shares tumbling 7.9 percent in early trading on Germany's DAX index to 88.81 euros ($100.17).
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