After the green light of the US Antitrust Authority, there are no more obstacles to the acquisition of Monsanto by the German Bayer. The game will close on June 7 at a price of 63 billion dollars including the debt of the acquiree. Once the merger is complete, the Monsanto brand will be canceled. To finance the acquisition of the American group of GMOs and pesticides, the Germans will launch a € 6 billion capital increase.
“The acquisition of Monsanto represents a strategic milestone in strengthening our portfolio of leading companies in the field of health and nutrition. We will double the size of our agricultural business and create a leading innovation engine for agriculture, positioning ourselves to better serve our customers and unlock the long-term growth potential in the sector, “comments Bayer president Werner Baumann.
The operation announced in May 2016 has been given the go-ahead by the US Antitrust Authority on May 29th and will give life to the largest integrated pesticide and seed company in the world. The approval of the Antitrust Division of the Department required the sale of parts of the companies, to ensure the protection of competition. “The American agricultural system is of fundamental importance for our economy, for our food system and for our lifestyle,” stressed the head of the Antitrust Authority, Makan Delrahim.
Bayer received all the approvals required by regulatory authorities following the sale of companies that generated € 2.2 billion in sales in 2017 for a base aggregate price of € 7.6 billion. Taking into account Monsanto and the assets sold, in 2017 the health and agricultural companies would have been approximately equal in size, with total pro forma sales of about 45 billion euros, including the combined sales of Crop Science for 20 billion. In 2017, both companies employed approximately 115,000 people, representing the sales.
Since the acquisition, Bayer already provides a positive contribution to basic earnings per share from 2019. From 2021 onwards, the benefit should be in double-digit percentage. In addition, adjusted for sales, Bayer expects US $ 1.2 billion synergies to EBITDA before special rumors since 2022. In order to acquire Monsanto, Bayer has secured an initial $ 57 billion bridge loan .
“All the public authorizations needed to complete the acquisition are on the table now. Bayer will become the sole owner of the Monsanto Company on June 7, “reads a statement from Bayer. This is the largest acquisition of a German company abroad, they point out the national media, remembering that the project has been working for two years.
“With the acquisition of Monsanto by Bayer, after the merger between DuPont and Dow Chemical and the acquisition of Syngenta by ChemChina, 63% of the seed market and 75% of that of crop protection products is concentrated in the hands only three multinationals with a clear imbalance of bargaining power towards farmers “, comments Coldiretti. The billion and a half of world agricultural producers, according to a statement, “are held in a pincer by a few large multinational groups that dictate the rules of the market in the sale of technical means necessary for the cultivation and breeding on farms, starting from seeds, but also in the purchase and marketing of agricultural and food products “.
The loss of bargaining power, continues Coldiretti, translates into economic and employment difficulties for farmers at a global level, but the high concentration also jeopardizes the freedom of choice of consumers and the standards of food quality and safety, as well as the same food sovereignty of the various countries and the biodiversity of individual countries. According to the organization, therefore, it is evident the need for Italy to strengthen the system of the Agricultural Consortia, which are “the reference of 300 thousand companies widely spread over almost the whole territory, including the most difficult areas, and have extended their operations, from technological innovation to supply chain contracts, from agroenergy to gardening, from the supply of technical means to the protection of seeds at risk of extinction and can challenge the future with new investments the challenge of precision agriculture and the use of big data “.