LEVERKUSEN, GERMANY - Executives for German company Bayer confirmed late yesterday that the company is in preliminary talks to acquire Monsanto.
As we previously reported, news that both Bayer and BASF SE broke May 12th. Reuters reported that interest in the seed producer showcased a drive for further consolidation in the seed sector.
Bayer is valued at about $96 billion, while Monsanto is valued at upwards of $44 billion.
The proposed combination of the two companies would reinforce Bayer as a global, innovation-driven, Life Science company, according to a press release, with leadership positions in its core segments, and would create a leading integrated agriculture business.
It has only been two weeks since Werner Baumann took over as Chief Executive for Bayer. As the company goes into discussions, the Wall Street Journal has reported this could be the biggest foreign corporate takeover effort ever by a German company.
Bayer’s stock dropped to $88.51 per share following the announcement, down 8.2%, as of 5:35 p.m. ETR.
Contrarily, Monsanto’s stock reflected as much as a 5.21% boost today, as of 12:41 p.m. EDT, at $102.16 per share.
Markus Manns, a portfolio manager at Bayer shareholder Union Investment, told WSJ that he felt the discussion was “a big stretch” financially, adding, “I’m not so sure it is a good move.”
It is far from the only financial move the company is making, however.
This morning Bayer also announced that it had signed off on the sale of its Environmental Science unit to SBM, which includes both the Bayer Garden and Bayer Advanced businesses in Europe and North America.
"In SBM, we’ve found a strategic acquirer that can provide the Bayer Garden and Bayer Advanced businesses and people with a long-term vision and perspective to reach their full potential," Dr. Jacqueline Applegate, Head of Environmental Science and Member of the Crop Science Executive Committee, stated in a release. "At the same time, divesting the Consumer business will enable Environmental Science to become even more growth-oriented and strengthen our market leadership position with a single-minded focus on the unique needs of our professional customers."
Expected to close in October of 2016, the deal encompasses the entire product portfolios of Bayer Garden and Bayer Advanced, plus all their current R&D projects. The companies stated that no impact is expected on the ongoing businesses, which will continue to operate until finalized before all employees, about 250 positions, transfer to SBM.
"For SBM, the acquisition of the Bayer Garden and Bayer Advanced businesses represents a major milestone in our journey toward global leadership in the consumer home and garden industry," Jean-Paul Simmler, Chairman of SBM, said. "We are committed to growing these businesses over the long-term by providing customers in Europe and the U.S. with an innovative range of solutions that leverages the strengths of both SBM and Bayer."
The financial terms of the transaction were not disclosed, but with what appears to be even more moves from Bayer on the way, keep staying up to date with AndNowUKnow.
