Bayer and Monsanto have spent the last several months going back and forth on merger deals, but after throwing in a few billions extra, the German chemical company has successfully reached a deal with the American-based seed giant. What was the magic number? $66 Billion.
this deal is one for the history books
Valued at $128 a share, this deal is one for the history books. The 2008 deal between Anheuser-Busch and InBev was once the largest at $60 billion, but Bayer has shown us that Germany has power when it comes to buying American giants.
What does this deal mean for consumers? While Bayer is not an unfamiliar household name, Monsanto plays it quiet. Chances are most of us come in contact with their products on a daily basis without ever noticing.
Monsanto does its business with the growers of food, many times against their will, with the sale and use of genetically modified seeds. They also produce the weed-killing Roundup.
Environmentalists continuously battle it out with Monsanto over the chemicals forced into our food chain, though experts at the National Academies of Sciences have stated that there are no substantiated proof that the chemicals produce a risk to our health or environment.
So whats in it for Bayer? The German company’s sales last year were a whopping 46.3 billion Euro ($51 billion), and with 30 percent of those sales coming from its own crop division, it is one of the fastest growing businesses for the company. With the purchase of Monsanto, which saw sales of $15 billion last year, Bayer would instantly double their crop division.
While the two companies have agreed on the deal, it still has to go before American and German antitrust regulators.
This year a $150 billion deal between Pfizer and Allergan was completely shutdown by regulators, and this deal between Bayer and Monsanto will surely be met with similar scrutiny.
Both companies have expressed confidence that this deal will be different, and that it will be approved, but if not, Bayer has agreed to pay a $2 billion breakup fee to Monsanto.