Monsanto Said in Multiple Talks

30.06.2016 -

CEO Hugh Grant surprised Monsanto’s earnings press conference on Jun. 29 with remarks that the US seeds giant is in talks with Bayer and “other companies” regarding “alternative strategic options” to the company’s complete takeover by Bayer. Earlier in the month, Monsanto had rejected the German group’s $62 billion takeover offer, triggering speculation that it was waiting for a higher offer. At the time, Bayer said it would not increase its bid unless the US rival opened its books – which it so far has not done.

Cryptically, Grant said Monsanto's options could include combinations with other companies and businesses in the sector beyond Bayer. Analysts commented that potential deals could involve BASF or any businesses divested from the Dow/DuPont merger, according to analysts.

"Monsanto remains the partner of choice in this industry and I assure you that we will continue to actively explore these opportunities,” Grant said, adding that talks had been ongoing for the several weeks, but he had “no formal update on the Bayer proposal.”  Bayer has not commented further.

In a comment some observers said was unusual because no application shad been filed, on the same day as the Monsanto results conference, a representative of the European Commission indicated that the EU competition authority would conduct a strict review of Bayer’s takeover offer for Monsanto as well as similar mergers planned by rivals.

The comments appeared to be more theoretical than formal as they were made in response to a query by Green party members of the European Parliament. In answering the query, Vestager said the Commission “will take into account your concerns about the effects of the Bayer-Monsanto merger on prices, the variety of available seed products as well as research and innovation.”

Especially as they are being negotiated simultaneously, Vestager said all three announced mergers in the seeds and agrochemicals sector would be examined “very carefully.”

Some observers meanwhile have suggested that the planned $43 billion takeover of Swiss agrochemical giant Syngenta, or parts of it, by ChemChina could be shaky. Even before worldwide antitrust authorities gear up to have a go at it, the deal is already being eyed critically by the US Committee on Foreign Investment (CIFUS), which is reviewing possible implications for national security.

In mid-June, ChemChina is said to have been obliged to resubmit its application to CIFUS to provide updated information on its ownership. This followed the disclosure that a fund  managed by People’s Republic-owned investment company Citic Trust had taken a $5 billion stake in the chemical producer company that would help reduce its reliance on foreign loans to finance the deal.