Bayer Monsanto Deal Could Create a Major Agricultural Force

monsanto co. agreed to sell itself to bayer ag after months of haggling, in a $57 billion deal that would create an agricultural powerhouse and end the independence of one of the most successful and controversial companies in the u.s.

 

if regulators approve the deal, which was unveiled wednesday, the german pharmaceutical and chemical conglomerate would inherit monsanto’s market-leading position in seeds and crop genes. that would tilt bayer heavily toward agriculture in a long-range bet on high-tech crops to sustain a growing global population.

 in the near term, the sale of st. louis-based monsanto, long a ubiquitous presence in american agriculture, spotlights a sagging u.s. farm economy that shows few signs of rebounding as farmers prepare to reap another in a string of record corn and soybean crops this autumn.

 

the bayer-monsanto union is the latest in a wave of tie-ups that have reordered the $100 billion global market in crop seeds and pesticides in the past 10 months. major fertilizer producers also have pursued deals. seed makers, having laid off thousands of employees and mothballed some research projects, regard mergers as a way to cut costs while more deeply integrating the development of new seeds and chemicals.

bayer plans to fuse its prowess in pesticides – it ranks among the world’s largest suppliers – with monsanto’s capabilities in seed genetics and biotechnology, which have allowed it to develop corn, soybeans, cotton and other crops that can survive weed-killing sprays and make natural toxins to repel bugs. the merged company would be the largest supplier by sales of both seeds and pesticides.

 

for the full article by jacob bunge & christopher alessi for the wall street journal click here