Biggest German M&A Deal Ever: Monsanto Accepts Bayer's $66 Billion Takeover Offer, Creating Agri-Giant

[FunkyMike]

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In a transaction that will allow Bayer to command more than a quarter of the combined world market for seeds and pesticides, not to mention is set to be the biggest M&A deal for 2016, Reuters reported that Bayer has won over Monsanto's management with a $128 per-share cash offer to acquire the global seed market leader, in a deal worth $66 billion.

 

Bayer has signed a deal that includes a fee of $2 billion should the transaction fail to get regulatory clearance as planned, the Reuters source said. The deal is expected to close by the end of 2017, the source told Reuters on Wednesday.

 

 

 

According to Reuters calculations, at a total deal value of close to $66 billion - based on 442 million Monsanto shares and the U.S. group's net debt of $9.3 billion as per end-May - it will be the largest transaction ever involving a German buyer. It would trump Daimler's merger deal with Chrysler in 1998, which valued the U.S. carmaker at more than $40 billion.

 

By accepting Bayer's offer, the largest cash acquisition proposal on record ahead of brewer InBev's $60.4 billion offer for Anheuser-Busch in 2008, Monsanto is set to give the German company a shot at grabbing the top spot in the fast-consolidating farm supplies industry, combining its crop science business with Monsanto's strength in seeds. It will also set the stage for the deal to be closely scrutinized by antitrust regulators, with some analysts predicting that various anti-trust authorities will not be too excited with the combined company.

 

The breakthrough in negotiations, which follows more than four months of talks, came after Bayer further improved on the sweetened offer of $127.50 per share in cash it disclosed last week, the people said. However, the deal will still value Monsanto at less than $130 per share, which the company was previously hoping to fetch, the people added.

 

Once St. Louis, Missouri-based Monsanto's board of directors approves the deal on Tuesday, Leverkusen-based Bayer's supervisory board will meet on Wednesday to also authorize the transaction, with an announcement expected before the stock market opens in New York on Wednesday, some of the people said.

 

The two companies were in talks to sound out ways to combine their businesses as early as March, which culminated in Bayer coming out with an initial $122 per-share takeover proposal in May.

 

http://www.zerohedge.com/news/2016-09-14/biggest-german-ma-deal-ever-monsanto-accepts-bayers-66-billion-takeover-offer-creati

[Yogurth]

Terrible news for Europeans. This means that GM food will be heavily lobbied in EU now and in due time it will be made legal to produce it distribute it and patent it. Natural or Hybridised crops days are over. Pharmacy, Food industry are right by Banking and Insurance companies how much damage they do to the Planet.

[FunkyMike]

20 minutes ago, Yogurth said:

Terrible news for Europeans. This means that GM food will be heavily lobbied in EU now and in due time it will be made legal to produce it distribute it and patent it. Natural or Hybridised crops days are over. Pharmacy, Food industry are right by Banking and Insurance companies how much damage they do to the Planet.

Hopefully this isn't part of some TTIP backdoor.

[+Mirumir Subscriber¹]

10 hours ago, FunkyMike said:

Hopefully this isn't part of some TTIP backdoor.

Could be especially if we take a look at Bayer AG's ownership structure.

 

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The highest proportion of our outstanding shares, almost 28 percent, is held by investors in the United States and Canada

If we add the folks from the U.K., the English-speaking investors own 46.6% of this historically German and these days global company.

 

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According to Reuters calculations, at a total deal value of close to $66 billion - based on 442 million Monsanto shares and the U.S. group's net debt of $9.3 billion as per end-May - it will be the largest transaction ever involving a German buyer. It would trump Daimler's merger deal with Chrysler in 1998, which valued the U.S. carmaker at more than $40 billion.

Can't agree with this part.

 

Back in 1998, $40 billion would buy 133 million ounces of gold at approx. $300 per ounce.

 

Nowadays, these same 133 million ounces of gold cost $176 billion at $1320 per ounce.

 

If based on CPI calculations, $40 billion in 1998 would equal ~$67 billion in today's adjusted dollars.

[FunkyMike]

14 hours ago, Mirumir said:

If we add the folks from the U.K., the English-speaking investors own 46.6% of this historically German and these days global company.

 

This is fairly normal in Germany since 45 etc.

 

Only 30% of the top German companies are actually in German hands. Many companies have a fairy diversified ownership structure.

 

 

[+Mirumir Subscriber¹]

33 minutes ago, FunkyMike said:

This is fairly normal in Germany since 45 etc.

 

Only 30% of the top German companies are actually in German hands. Many companies have a fairy diversified ownership structure.

True, however,is it 30% of all the top companies in Germany or 30% of all the top publicly-traded German-based enterprises?  

 

There are some big players there which remain in the private (families') or state's hands and don't have to disclose their ownership structure.

 

 

[DocM]

On 9/14/2016 at 7:03 AM, Yogurth said:

Terrible news for Europeans. This means that GM food will be heavily lobbied in EU now and in due time it will be made legal to produce it distribute it and patent it. Natural or Hybridised crops days are over. Pharmacy, Food industry are right by Banking and Insurance companies how much damage they do to the Planet.

GM foods are not an issue. The handwringing over them is a great example of (some) progressives/enviros pushing anti-science. The corn study by Gilles-Eric Séralini was totally discredited and had to be withdrawn.

 

This isn't to say that they have to be managed properly so they don't exit their fields and become invasive, but that can be done - especially those crops which can be farmed indoors at a high density. That's a large and growing number.

Edited September 15, 2016 by DocM

[Yogurth]

1 hour ago, DocM said:

GM foods are not an issue. The handwringing over them is a great example of (some) progressives/enviros pushing anti-science. The corn study by Gilles-Eric Séralini was totally discredited and had to be withdrawn.

 

This isn't to say that they have to be managed properly so they don't exit their fields and become invasive, but that can be done - especially those crops which can be farmed indoors at a high density. That's a large and growing number.

While I can, from scientific point of view, support the research that goes into GM crops, I can't support the introduction of these into environment, as it is already clear that they have devastating effect on surroundings just as they are. Whn You take into account that the usage of herbicides and pesticides on these fields is substantially bigger than with the regular crops You have an ecological disaster. Not to mention that we still have no idea what are the long term effects on human body that these bring since they are tipping the natural balance that has been evolving for millions of years. There are numerous studies that show preliminary ill effects on everything that GM food and it's trailing industry touches.

 

On top of that, Monsato and it's patenting war against natural crops and farmers is just despicable for the lack of a better word. It is the company made of nightmares, the company that brought us among other stuff Agent Orange.

[Draconian Guppy]

2 minutes ago, Yogurth said:

While I can, from scientific point of view, support the research that goes into GM crops, I can't support the introduction of these into environment, as it is already clear that they have devastating effect on surroundings just as they are. Whn You take into account that the usage of herbicides and pesticides on these fields is substantially bigger than with the regular crops You have an ecological disaster. Not to mention that we still have no idea what are the long term effects on human body that these bring since they are tipping the natural balance that has been evolving for millions of years. There are numerous studies that show preliminary ill effects on everything that GM food and it's trailing industry touches.

 

On top of that, Monsato and it's patenting war against natural crops and farmers is just despicable for the lack of a better word. It is the company made of nightmares, the company that brought us among other stuff Agent Orange.

I agree, except the herbicides and pesticides goes on both in GM and non-GM. How much goes into which is truly debatable. Ill give you an example.

 

Where I live, Honduras, Central America,  we lost almost 80% of all our coconut trees due to some bark beatle and funghi, then they brought in a new variation, I dont recall from where, which was immune to the pests mentioned before, effectively reducing pesticide use in that sense. Now, why we got that nasty plague is a whole different story. But anyway, adding my two scents.  I think as it is today, some countries, such as developing ones, simply cant afford not to use non-gm plants.

 

[Yogurth]

2 minutes ago, Draconian Guppy said:

I agree, except the herbicides and pesticides goes on both in GM and non-GM. How much goes into which is truly debatable. Ill give you an example.

 

Where I live, Honduras, Central America,  we lost almost 80% of all our coconut trees due to some bark beatle and funghi, then they brought in a new variation, I dont recall from where, which was immune to the pests mentioned before, effectively reducing pesticide use in that sense. Now, why we got that nasty plague is a whole different story. But anyway, adding my two scents.  I think as it is today, some countries, such as developing ones, simply cant afford not to use non-gm plants.

 

It is the chain reaction that is the problem. You introduced resistant crop to something, that something is the catalyst for something else that is crucial down the line, but since it is gone there won't be that crucial thing and then there won't be something that is dependent on that crucial process....etc. The consequences are hard to fathom from where we stand.

[DocM]

19 minutes ago, Yogurth said:

While I can, from scientific point of view, support the research that goes into GM crops, I can't support the introduction of these into environment, as it is already clear that they he devastating effect on surroundings just as they are. Whn You take into account that the usage of herbicides and pesticides on these fields is substantially bigger than with the regular crops You have an ecological disaster.

http://www.popsci.com/article/science/core-truths-10-common-gmo-claims-debunked

 

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7) Claim: Genetically modified crops cause farmers to overuse pesticides and herbicides.

 

This claim requires a little parsing. Two relevant GMOs dominate the market. The first enables crops to express a protein from the bacterium Bacillus thuringiensis (Bt), which is toxic to certain insects. It's also the active ingredient in pesticides used by organic farmers. Bt crops have dramatically reduced reliance on chemical insecticides in some regions, says Bruce Tabashnik, a University of Arizona entomologist.

 

The second allows crops to tolerate the herbicide glyphosate so that farmers can spray entire fields more liberally yet kill only weeds. Glyphosate use has skyrocketed in the U.S. since these GMOs were introduced in 1996. But glyphosate is among the mildest herbicides available, with a toxicity 25 times less than caffeine. Its use has decreased reliance on more toxic alternatives, such as atrazine.

 

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Not to mention that we still have no idea what are the long term effects on human body that these bring since they are tipping the natural balance that has been evolving for millions of years.

 

It's hybridization by other means, something humans have been doing for millennia. Some criticize bringing in DNA from other organisms, but nature does that too.  Frequently those sequences get co-opted for our own use; much of your DNA is from viruses or bacteria you or your ancestors were infected with. Women can grow placentas, and men larger muscles, because of a DNA transfer from a virus by our far ancestors.  

 

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There are numerous studies that show preliminary ill effects on everything that GM food and it's trailing industry touches.

 

 

The vast minority, and most have been roundly criticized or even withdrawn (the corn study.)  Many of the rest are tinfoil hat material or a small cabal of biologists whose funding is jeopardized.

 

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On top of that, Monsato and it's patenting war against natural crops and farmers is just despicable for the lack of a better word. It is the company made of nightmares, the company that brought us among other stuff Agent Orange.

Agent Orange has zero to do with this, it's a distraction from facts and appeal to emotion.  As for patenting, that's better taken up with your govt since it makes the rules. Everyone uses them to their advantage. Don't like them, get them changed.

[ctebah]

This will not be a good news for a lot of the farmers worldwide.  The good thing is that the push for non-gmo foods is growing, consumers around the world are starting to ask for more crops that are not GMO.

[Yogurth]

21 minutes ago, DocM said:

http://www.popsci.com/article/science/core-truths-10-common-gmo-claims-debunked

 

 

It's hybridization by other means, something humans have been doing for millennia. Some criticize bringing in DNA from other organisms, but nature does that too.  Frequently those sequences get co-opted for our own use; much of your DNA is from viruses or bacteria you or your ancestors were infected with. Women can grow placentas, and men larger muscles, because of a DNA transfer from a virus by our far ancestors.  

 

The vast minority, and most have been roundly criticized or even withdrawn (the corn study.)  Many of the rest are tinfoil hat material or a small cabal of biologists whose funding is jeopardized.

 

Agent Orange has zero to do with this, it's a distraction from facts and appeal to emotion.  As for patenting, that's better taken up with your govt since it makes the rules. Everyone uses them to their advantage. Don't like them, get them changed.

Here is a list of reference studies (around 2 pages) with a small summary what GM crops do to the environment. 

 

http://www.greenpeace.org/australia/PageFiles/434214/GM_Fact Sheet_Health_ and_Env_Impacts.pdf

 

Agent oragne has nothing to do with it, but the company that made it has everything to do with  it's moral grounds.

 

Like I said evolution had millions of years to test gene mixing. Humans playing with this is just asking for disaster.

 

As for government responsibility over patenting issues...well you just made me chuckle.

Edited September 15, 2016 by Yogurth

[Draconian Guppy]

42 minutes ago, DocM said:

http://www.popsci.com/article/science/core-truths-10-common-gmo-claims-debunked

 

 

It's hybridization by other means, something humans have been doing for millennia. Some criticize bringing in DNA from other organisms, but nature does that too.  Frequently those sequences get co-opted for our own use; much of your DNA is from viruses or bacteria you or your ancestors were infected with. Women can grow placentas, and men larger muscles, because of a DNA transfer from a virus by our far ancestors.  

 

The vast minority, and most have been roundly criticized or even withdrawn (the corn study.)  Many of the rest are tinfoil hat material or a small cabal of biologists whose funding is jeopardized.

 

Agent Orange has zero to do with this, it's a distraction from facts and appeal to emotion.  As for patenting, that's better taken up with your govt since it makes the rules. Everyone uses them to their advantage. Don't like them, get them changed.

I need the sauce for this:  

The second allows crops to tolerate the herbicide glyphosate so that farmers can spray entire fields more liberally yet kill only weeds. Glyphosate use has skyrocketed in the U.S. since these GMOs were introduced in 1996. But glyphosate is among the mildest herbicides available, with a toxicity 25 times less than caffeine. Its use has decreased reliance on more toxic alternatives, such as atrazine. 

 

Very interesting! 

 

edit> found it:

 

http://www.realclearscience.com/2014/04/30/caffeine_is_more_toxic_than_common_herbicide_258789.html

Edited September 15, 2016 by Draconian Guppy

[DocM]

42 minutes ago, Yogurth said:

Here is a list of reference studies (around 2 pages) with a small summary what GM crops do to the environment. 

 

http://www.greenpeace.org/australia/PageFiles/434214/GM_Fact Sheet_Health_ and_Env_Impacts.pdf

 

It makes 2 claims, one being that Bt is dangerous to the environment, which is silly beyond description. Bt = Bacillus thurengiensis, which is naturally found is soil and numerous other locales. Some produce an insecticidal protein, δ-endotoxins, during sporulation. Widely studied, the claims against it have been regularly swatted down or found to be overstated. In fact, Bt is widely used by organic farmers and approved for that use. I've been using it in out gardens for over 30 years on tomatoes and other crops with no problems at all.

 

The second point about insecticide resistance is true for any of them. Better to increase doses or modify a relatively benign one like glyphosate than the alternatives of stronger chemicals or blights. The mods are usually very slight.

[Yogurth]

23 minutes ago, Draconian Guppy said:

I need the sauce for this:  

The second allows crops to tolerate the herbicide glyphosate so that farmers can spray entire fields more liberally yet kill only weeds. Glyphosate use has skyrocketed in the U.S. since these GMOs were introduced in 1996. But glyphosate is among the mildest herbicides available, with a toxicity 25 times less than caffeine. Its use has decreased reliance on more toxic alternatives, such as atrazine. 

 

Very interesting! 

 

edit> found it:

 

http://www.realclearscience.com/2014/04/30/caffeine_is_more_toxic_than_common_herbicide_258789.html

Monsanto was cornered about glyphosate a year ago after evidence has surfaced that Monsanto was aware of  genotoxicity of Glyphosate since 1981. Based on that  Glyphosate was moved up the toxicity ladder and is far from mildly toxic or benign.

 

http://sustainablepulse.com/2015/04/09/monsanto-knew-of-glyphosate-cancer-link-35-years-ago/#.VSrOZ_nF9e7

[DocM]

It's still not DDT or as toxic as others.

[Yogurth]

2 minutes ago, DocM said:

It's still not DDT or as toxic as others.

Tell that to this guy.

 

 

[Yogurth]

Here is a small European (German) documentary on Glyphocite and it's long and short term toxic effects.

 

 

[PGHammer]

On 9/14/2016 at 7:03 AM, Yogurth said:

Terrible news for Europeans. This means that GM food will be heavily lobbied in EU now and in due time it will be made legal to produce it distribute it and patent it. Natural or Hybridised crops days are over. Pharmacy, Food industry are right by Banking and Insurance companies how much damage they do to the Planet.

Why is it terrible news for Europeans (since Bayer - the German company - is the buyer)?  Bayer Agricultural is the biggest ag company on the planet by far - despite the continued success of Monsanto's Roundup - an herbicide, and the biggest success in Monsanto's current portfolio.  The problem for Monsanto is that Roundup is also the ONLY recent success in Monsanto's ag portfolio; Bayer is cleaning Monsanto's clock otherwise - even in the US.  And do you REALLY think that Bayer has NOT been looking at GM ag products?  Non-GMO foodstuffs occupy the high-priced end of the foodstuff chain for several reasons; the average Joe or Jane - let alone the average Juan or Juanita in the developing world - is starving PERIOD; unfortunately, like it or not, non-GMO food may as well be manufactured out of Unobtanium - as that is how much greater the cost is over GMO foodstuffs - and especially in the BRIC or nations looking to get as HIGH as the BRIC.  Finally, do you REALLY think that BARC (the Beltsville Agricultural Research Center - the Department of Agriculture's research center that LEADS US-based research into the safety for consumption - by either humans OR animals - of GMO foodstuffs) is NOT sharing the data with their non-US counterparts?  Please - BARC is in fact REQUIRED to - by several treaties and agreements.  And if European ag concerns want to export, they can't do it and stick to non-GM foodstuffs - they plain and simply cannot meet the demand.  The US can't do it and cover the demand, either - and we OUTPRODUCE Europe!