Bayer cuts Monsanto synergy target by $300 million due to divestments.https://t.co/BoJxkha9kI— Global Awareness 101 (@Mononoke__Hime) May 25, 2018
Reuters News
written by Patricia Weiss
Friday May 25, 2018
BONN - Bayer (BAYGn.DE) said positive synergy effects from the planned takeover of U.S. seeds maker Monsanto (MON.N) would be about $300 million below its previous target because it will sell more businesses than initially expected to get antitrust approval.
Bayer Chief Executive Werner Baumann again threw his weight behind the deal, despite higher antitrust hurdles and delays in the regulatory reviews, speaking to shareholders at the annual general meeting on Friday.
“I’m convinced that this acquisition has very great potential for creating value for our company, our stockholders and our customers,” Baumann said, adding he expected the deal to be approved and closed in the near future.
If the deal is not closed by June 14, Monsanto could withdraw from the takeover agreement and seek a higher price.
The last major hurdle to clear is the go-ahead from U.S. regulators for the deal, worth $62.5 billion including debt, but Bayer has already come to an agreement in principle on the terms of approval with the Department of Justice.
It has agreed to sell assets, which include seed, crop chemicals and digital farming activities, with revenues of 2.2 billion euro ($2.6 billion) for 7.6 billion euros to rival BASF (BASFn.DE).
Combining with takeover target Monsanto will have synergy effects of about $1.2 billion on adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from 2022, Bayer said - less than the $1.5 billion targeted when the transaction was agreed in September 2016.
Bloomberg News
written by David McLaughlin
Friday May 25, 2018
Bayer AG is set to win U.S. antitrust approval for its $66 billion takeover of Monsanto Co. by next week, according to a person familiar with the matter, removing the last major regulatory hurdle to forming the world’s biggest seed and agricultural-chemicals company.
The companies and the Justice Department have negotiated a complex agreement that would resolve the government’s concerns that the merger as initially structured would harm competition, said the person, who asked not to be named because the matter is confidential. The deal could be announced as soon as Tuesday following months of negotiations.
The German company’s agreement to buy Monsanto, announced two years ago, is one of several deals involving seed and crop-chemical firms around the world. Last year, U.S. and EU regulators approved Dow Chemical Co.’s merger with DuPont Co. and China National Chemical Corp.’s takeover of Syngenta AG. The wave of transactions is set to create three industry behemoths, sparking concern among some farmers about higher prices and less choice.
St. Louis-based Monsanto rose 0.9 percent to close at $126.50, the highest since July 2014.
Representatives for Bayer, Monsanto and the Justice Department declined to comment. The timing of the announcement was reported earlier by MLex. Bayer, which has received approval in most jurisdictions, expects to close "in the near future," Chief Executive Officer Werner Baumann said Friday.
The agreement with the U.S. came together after Justice Department antitrust officials, led by Assistant Attorney General Makan Delrahim, pressed for significant divestitures to remedy the competition problems from combining the two companies. The agreement with the government includes asset sales and other conditions, said the person.
Bayer initially agreed in October to sell seed and chemical businesses to BASF SE for 5.9 billion euros ($6.9 billion). The deal included the herbicide brand Liberty, cotton and soybean seeds, and seed-trait and breeding capabilities.
Then in April, Leverkusen, Germany-based Bayer said it was selling more pieces of its agricultural business to BASF for as much as 1.7 billion euros to satisfy regulators. That deal covered Bayer’s vegetable-seeds business, other herbicides, research on wheat hybrids, and Bayer’s digital farming business.
The businesses Bayer is selling to its competitor had combined sales of 2.2 billion euros last year and employ about 4,300 people.
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