Bayer Eyes Monsanto Bid

By Pam Smith
DTN Progressive Farmer Crops Technology Editor

DECATUR, Ill. (DTN) -- The Germans pronounce Bayer as "Buyer." That's exactly what news reports suggest Germany's Bayer AG is contemplating through a potential bid for Monsanto.

Monsanto, valued at approximately $40 billion as of Wednesday's stock market close, made several failed bids for Syngenta last year. Since then, Dow Chemical Company and DuPont Company have announced plans to combine operations. China National Chemical Corporation (ChemChina) agreed in February to acquire Syngenta AG of Switzerland for $43 billion.

Although those transactions are not yet complete, industry analysts have speculated that the consolidation in the industry is not over. In an interview with DTN reporters last summer, Robb Fraley, Monsanto executive vice-president and chief technology officer, maintained that agriculture needs to embrace consolidation, not fear it.

"Even with as much attention as Monsanto gets, we're one-eighth or one-tenth the size of Google," Fraley said. "Yet we're trying to create state-of-the-art technologies for farmers." Technology in agriculture is too "fragmented," with too many research dollars spent in disjointed fashion by too many players, he and Monsanto CEO Hugh Grant have often said publically.

Bayer, which is valued at about $96 billion, refused to comment on the rumors. "As a matter of principle, we do not comment on market speculation," Darren Wallis, vice president, North America Communications at Bayer CropScience, told DTN. Sara Miller, global corporate communications at Monsanto echoed the same sentiment in an email to DTN. Rumors that German-based BASF is in the hunt have also surfaced. BASF and Monsanto have a long history of collaboration on various projects.

Bayer may be best known in non-agriculture sectors for discovering aspirin, but the company has compiled an extensive list of agricultural products and innovations. Farmers are familiar with the company's LibertyLink (glufosinate) herbicide technology. In 1985, Bayer patented imidacloprid as the first commercial neonicotinoid and has heavily invested in bee health research as that class of insecticides has been implicated in pollinator losses.

In seed, Bayer focuses on cotton through the FiberMax and Stoneville brands and InVigor canola. In recent years, the company has purchased some soybean seed businesses and branded the Credenz soybean line. Monsanto's strength in corn seed would fill a void in Bayer's seed portfolio.

Antitrust regulators in the U.S. and elsewhere are likely to closely examine whether a combination of the two agribusiness firms would concentrate too much market power. Monsanto pledged to divest all of Syngenta's seed and trait assets and certain overlapping chemistry assets to address anti-trust concerns during negotiations last year.

Pamela Smith can be reached at Pamela.smith@dtn.com

Read her on Twitter at @PamSmithDTN

(AG/BAS)

(AG?BAS)

Copyright 2016 DTN/The Progressive Farmer. All rights reserved.