Bayer takes over Monsanto

Bayer and Monsanto have signed a definitive merger agreement.

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Bayer will acquire Monsanto for $128 (about R1 800) per share in an all-cash transaction, according to a recent joint press release.

“Monsanto’s board of directors, as well as Bayer’s board of management and supervisory board have unanimously approved the agreement. Based on Monsanto’s closing share price on 9 May, the day before Bayer’s first written proposal to Monsanto, the offer represents a premium of 44% to that price,” the release said.

On whether the Competition Commission in South Africa would object locally to the take-over, Tasniem Patel, head of communication for Bayer in South Africa, said via email that “it would not be appropriate to comment on or pre-empt the outcome of the regulatory review process and/or the view of the relevant regulatory authorities”.

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On whether Bayer would attempt to use other products than the glyphosate and Roundup-ready goods deemed to be detrimental to human health, Patel said glyphosate was one of the most widely used broad-spectrum herbicide around the globe.

“All evaluations by regulatory authorities have so far concluded that glyphosate does not pose any unacceptable risk to human health, the environment or non-target animals and plants.

We note the European Commission’s 18-month re-extension of glyphosate authorisation, and as a science-based company, Bayer is optimistic that science remains at the heart of any regulatory process and decision-making,” Patel said.

In July, Farmer’s Weekly reported that Bayer AG, in its Monsanto takeover attempt, had increased its offer to $125 per share.

In May 2016, the offer stood at $122 per share.

Corné Louw, senior economist for inputs at Grain SA, told Farmer’s Weekly then that the takeover could result in concerns about a dominant agrochemical company, with the competition commission apprehensive about a concentration in the market.

“More role players create healthy competition, which is good for producers. Fewer competitors are normally not good for producers. In some instances, however, such transactions could lead to innovation in technologies that are combined. Because of this, seed prices would probably not be influenced,” Louw had said.