
Bayer confirms $66bn Monsanto takeover - nedsma
http://www.bbc.com/news/business-37361556
======
chollida1
Keep in mind that in today's global environment whenever a merger is proposed
it has to go through alot of government scrutiny. Not just in the US, but also
with the EU and China.

See the Haliburton/Baker Hughes merger that was blown up by the US government.

From a merger arbitrage perspective this has been a very interesting deal.
This is the 4th proposal Bayer has made for Monsanto and with an all cash
offer this might be enough, again assuming government approval.

They've went from an original offer of $122 to a final offer of $128/share.
And the deal includes a breakup fee of $2 Billion for Monsanto if the deal
falls through.

Monsanto has played this very well but the $128/share offer represents a 21%
bump from yesterday's close, which is a bit concerning. With the other offers
that have already been presented such a large premium means the market
believes that there is a decent chance that this deal doesn't go through, now
most likely due to government interference.

The typical remedy for governments who object to mergers is to have a company
sell of a division or twp to show that the new company won't be a defacto
monopoly.

Unfortunately in this case there is very little overlap between the two
companies. This means that there isn't really anything for Bayer or Monsanto
to sell off here.

The newly combined company will own the agricultural space, with a seeds and
chemicals integrated vertical that would impress Apple.

~~~
maxerickson
The article says _The tie-up, which will give the new company control of more
than 25% of the world 's supply of seeds and pesticides, comes amid a wave of
mergers in the agriculture sector._

I'm skeptical that there is any particular public benefit to allowing the
merger, but it seems a bit exaggerated to talk about the new entity owning the
market.

~~~
a_bonobo
Bayer CropScience is very small, just 2% of the global market, so them merging
with Monsanto isn't really a massive game changer, which runs 23% [1]. I don't
think it's going to shake up the market very much, could be that they even
lose market share when the merged company consolidates its offerings. For
example, Bayer's Liberty Link cotton is used when the local pests have become
resistant to Monsanto's Glyphosate/Bt cotton, at some point Glyphosate/Bt
sales will go down.

In other news, Syngenta (9% of seed market) was recently acquired by ChemChina
but that deal is waiting for European authorities.

[1] Biased source: www.gmwatch.org/gm-firms/10558-the-worlds-top-ten-seed-
companies-who-owns-nature

------
reacweb
Many documentaries have been broadcasted on TV in France about Mosanto. It was
depicted a the evil personified (like [http://topdocumentaryfilms.com/the-
world-according-to-monsan...](http://topdocumentaryfilms.com/the-world-
according-to-monsanto/)). Most of this must be correct because no repeated
broadcast has been prohibited.

Now, I wonder if this was a plot. Maybe Bayer has favored these broadcasts to
reduce the cost of takeover. Maybe Bayer is worst than Mosanto. Welcome
paranoia.

~~~
i_live_there
"Maybe Bayer is worst"

[http://articles.mercola.com/sites/articles/archive/2006/08/0...](http://articles.mercola.com/sites/articles/archive/2006/08/05/bayer-
sells-aids-infected-drug-banned-in-us-in-europe-asia.aspx)

[http://anonhq.com/yes-bayer-drug-knowingly-infected-
people-h...](http://anonhq.com/yes-bayer-drug-knowingly-infected-people-hiv/)

------
giarc
Another agriculture merger was announced last week, albeit smaller, between
Potash and Agrium.

[http://www.cbc.ca/news/business/potash-agrium-
merger-1.37579...](http://www.cbc.ca/news/business/potash-agrium-
merger-1.3757953)

------
kriro
The PR implications of this, particularly in Germany, will be interesting to
follow.

~~~
afandian
What's the PR angle for Monsanto and Bayer in Germany? In the UK, Monsanto is
'the big evil American company' and Bayer is 'the big evil German company' (of
course we have own own).

~~~
skrause
In Germany Monsanto is 'the big evil American company' and Bayer is just a big
company.

~~~
WilliamDhalgren
any chance this could help the perception of GMOs in Germany then?

~~~
TillE
No. GMOs are more or less banned throughout Europe for legitimate ecological
concerns, with plenty of grassroots opposition in Germany. The fact that it's
a field dominated by one of the more evil companies in the world is secondary.

~~~
WilliamDhalgren
to be more precise, they can be sold but then need to be labeled. Prob used in
animal feedstock, but not attractive to market for human use in that form. I
presume animal feed's still a significant market, but unsure if there's
significant GMO market penetration there.

Only one GMO (a bt corn I think) could be planted in the EU, and used mostly
in Spain, though there's some hope the new rules will enable pro-GMO countries
to plant many more in the future (approval process was generally stuck in the
Council because enough countries opposed GMOs; now they can just ban them on
their own territory w/o preventing pro-GMO countries from using it, and
avoiding a conflict is politically attractive).

I personally see it as an ecological gain, due to productivity and so landuse
improvements, something europe has basically stagnated at since these bans.

Sad to hear not much chance of improvements in the political sphere on that
front..

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MichaelMoser123
The faz says that in other news ChemChina is buying Syngenta - these are two
big companies; Are there any hidden reasons why agriculture tech companies are
so interested in mergers these days?

Hmm.. here [1] it says that "three straight years of declining prices for
major crops have pressured profits and forced companies to scale back staff
and research."; Does that explain the pressure for mergers in this area?

[1] [http://www.wsj.com/articles/chemchina-details-changes-to-
str...](http://www.wsj.com/articles/chemchina-details-changes-to-structure-of-
planned-syngenta-purchase-1466178106)

and that is supposedly because a glut in corn and soybeans is driving prices
down;

[http://www.journalgazette.net/news/us/High-corn-yield-
hurts-...](http://www.journalgazette.net/news/us/High-corn-yield-hurts-farmers
--bottom-line-15228819)

~~~
MichaelMoser123
i am wondering about the larger impact of agricultural issues on the economy &
politics; i wonder if anyone ran a study of this factor over the long run:

for example the crash of 2008 was preceded by a long drought that caused a
steep increase of food prices; also Arab countries were then unable to keep up
food subsidies, so the Arab spring came and forced the governments out; Also
the French revolution was preceded by a drought + the French state was
basically bankrupt.

------
J5892
This is great news for conspiracy theorists.

------
jMyles
The competition angle isn't what scares me, it's the incentives created by the
appearance that Monsanto, an entity whose primary income streams come from
utilizing, manipulation, and corrupting the common-sense understanding of IP
laws (even unto victimizing farmers who experience pollen drift from nearby
farms which use Monsanto products [0]) has generated an exit at over 20% bump
in share price.

IMO, the IP legal structure surrounding Monsanto's activities is no different
than a direct government subsidy to that company, and given its downright evil
actions, I don't think most voters want to subsidize it.

0:
[https://www.sustainablebusiness.com/index.cfm/go/news.displa...](https://www.sustainablebusiness.com/index.cfm/go/news.display/id/23451)

~~~
akvadrako
Your source is very biased. Do you have any evidence of Monsanto suing farmers
for unintentionally growing crops from seeds that have drifted onto their
fields?

The most well know case is Monsanto Canada Inc v Schmeiser, but the facts do
not support the farmer's claims of innocence. It's clear he tried to grow and
acquire as many of Monsanto's seeds as he could.

The case you pointed to is about invalidating Monsanto's patents, or at least
rendering them unenforceable. It's plainly just an attempt for farmers to save
money by using Monsanto's seeds without paying for them and nothing about
"victimisation".

~~~
darkarmani
> It's clear he tried to grow and acquire as many of Monsanto's seeds as he
> could.

What's wrong with that? If your patent passes on its genes onto my corn, then
it's no longer exactly your plant.

------
drcross
How can the competition authority allow this to happen?

~~~
rayiner
It hasn't happened yet, but I'd suspect the merger will be approved. First,
the general assumption among most competition authorities these days is that
companies should be free to merge unless doing so would raise serious
antitrust concerns. The focus of antitrust theory is on companies that compete
directly with each other (e.g. Microsoft versus Google compete directly in
search). Vertical integration (e.g. Apple buys Netflix), in comparison,
doesn't raise the same concerns of immediate and direct reduction in
competition.

~~~
_delirium
In cases where vertical integration raises concerns, antitrust regulators seem
to have also gotten more comfortable with attaching merger conditions rather
than blocking the merger entirely. For example telecom mergers that produce
vertical integration routinely are approved with conditions regarding third-
party infrastructure access. The first big deal I can remember with such a
condition was the AOL-Time Warner merger, which was approved on condition that
Time Warner offer third-party ISPs wholesale access to its cable network.

Now that there are several big regulators involved (the EU, US, and China,
mainly), that kind of thing could still scuttle deals, though, if the set of
conditions becomes too big and conflicting. I'm pretty sure I recently ran
across one such deal, that was approved but with conditions that investors
balked at, effectively killing it, but googling isn't turning it up.

------
josh_carterPDX
Well this seems absolutely fucking horrible.

------
wcchandler
one of my concerns regarding this is the likely increase in patenting of
genetic plant material, but specifically for the plants that are used in
medicine. This will especially be problematic when it comes to medicinal
cannabis. Monsanto will engineer a "perfect strain" then make considerable
profits off it. That's concerning because it's about to shift the drug war and
I'm not sure where it will go.

~~~
pc86
I mean if a company (Monsanto or anyone else) actually does develop a perfect
strain for medical use they certainly deserve the profit, don't they? I'm no
fan of Monsanto but it doesn't mean that they're not entitled to the things
any other company is entitled to in a capitalist society.

I could certainly see how the drug war could change following this in both
good and bad ways, though I'm not sure they're connected enough that it should
impact a potential merger?

------
cryoshon
This won't have negative consequences for the public at all.

/s

~~~
pygy_
Zyklon B to buy Agent Orange... Such a nice fit.

~~~
pinaceae
a bit more complicated - IG Farben also produced multiple Nobel Prices in
Medicine, represented the merged version of pretty much the complete German
chemical industry.

AGFA, Bayer, BASF, Sanofi all trace back to IG Farben.

Not unlikely that you personally are alive because of their contributions to
medicine. Unlike say Coca Cola or McDonalds. But yes, at the same time IG
Farben used slave labor in WW2, experimented on humans and had a subsidiary
produce Zyklon B.

History is complicated.

~~~
flyinghamster
WW2 was in some ways as much a war between corporations as it was a war
between governments. Not to mention, some corporations happily played both
sides of the conflict; ITT [0] and General Motors [1] among the more notorious
examples.

[0] [http://reformed-
theology.org/html/books/wall_street/chapter_...](http://reformed-
theology.org/html/books/wall_street/chapter_05.htm) (drawing on other sources)

[1] [http://www.sfgate.com/opinion/article/Nazis-rode-to-war-
on-G...](http://www.sfgate.com/opinion/article/Nazis-rode-to-war-on-GM-
wheels-2659006.php)

------
dfeart3453465uf
Could be interesting? Selling Glyphosate and 'roundup-ready' GMO crops is
their main line of business in the United States for a long time! Monsanto is
already a evil evil organisation -- and now they have the inventors of Heroin
at the helm.

~~~
pinaceae
are we for the legalization of drugs today or against?

Heroin, basically a form of Morphine, has legit medical uses. Just like LSD
and other fairly simple, potent molecules. Banning any R&D outright on them
was a huge setback for medicine.

------
johnward
I thought Bayer was Covestro now. So I had to look it up and Bayer still
exists but Covestro was spun off.

"Covestro is a spinout formed in the fall of 2015 from Bayer; it was formerly
Bayer's $12.3 billion materials science division. "

------
pearjuice
>Bayer has been involved in controversies regarding some of its drug products;
its statin drug Baycol (cerivastatin) was discontinued in 2001 after 52 people
died from renal failure, and Trasylol (aprotinin), used to control bleeding
during major surgery, was withdrawn from the markets worldwide when reports of
increased mortality emerged; it was later re-introduced in Europe but not in
the US.[0]

Can't wait to see what "pharmaceutical" solutions they will bring up together!

[0] [https://en.wikipedia.org/wiki/Bayer](https://en.wikipedia.org/wiki/Bayer)

~~~
JoeAltmaier
Of course there are controversies. They are damned if they do and damned if
they don't. We have half the folks crying "Hurry up approval of life-saving
drugs! Stop stalling! Too much paperwork!" and the other half "Condemn the
heartless drug company that rushed in a drug that killed (some) people! No
blood for profit!"

