Deal will be delayed
This week, Bayer stated that it expects the Monsanto (MON) acquisition to be delayed. According to Reuters, the deal would likely be scrutinized by EU (European Union) regulators by the January 8 deadline. However, Bayer asked for an extension to January 22. The EU regulators haven’t confirmed the extension. If they do, it pushes back the date when both companies will merge.
In the previous part of this series, we saw that the deal was expected to be complete by the end of 2017. However, Bayer expects the deal to be completed by early 2018. Monsanto’s seed business and Bayer’s crop protection business will make it one of the biggest agricultural companies (MOO) in the world. FMC (FMC), Syngenta (SYT), and Scotts Miracle-Gro (SMG) will feel negative pressure due to the deal.
With Monsanto, Bayer will be able to penetrate deeper into markets like North America, Latin America, and Europe, as you can see in the above chart.
Monsanto’s segments include Herbicides, Seeds & Traits, and SeedGrowth. The merger would add nearly 12.7 billion euros to Bayer’s top line. Earlier Bayer said, “This transaction would bring together leading Seeds & Traits, Crop Protection, Biologics, and Digital Farming platforms. Specifically, the combined business would benefit from Monsanto’s leadership in Seeds & Traits and Bayer’s broad Crop Protection product line across a comprehensive range of indications and crops.”
In the next part, we’ll discuss the merger’s opposition.