Signal of confidence
Bayer divests 2 parts for Monsanto deal
Bayer is launching business units again. It would be an American seed branch and software division of the German chemical group. This is being done to get approval from the European Commission (EC) for the Monsanto deal.
In September 2016, Bayer announced to US Monsanto for $66 billion, including debt, to take over† The EC Competition Authority drew in August last year, however, objected. This is because it was feared that there would be too much market power if the chemical groups merged. By divesting parts, the deal could potentially still go through.
In October sold In this context, Bayer already established the LibertyLink seed branch at the German BASF. In August, the EC reported that a decision on the deal will be made in early January 2018.
Trust in deal
The fact that Bayer has now again put 2 parts on the display can be seen as a signal that the management has confidence in a positive settlement of the Monsanto deal. The parts for sale, including the seed business sold to BASF, account for a turnover of approximately $1,6 billion. A source close to the acquisition is pretty confident that the Bayer and Monsanto will merge after all. Werner Baumann, CEO at Bayer, has also expressed several times that he is convinced that the merger with Monsanto will be completed in the first quarter of 2018.
Investors less hopeful
Monsanto's investors are significantly less hopeful of a positive settlement of the deal. They estimate the chance at a maximum of 40% that Bayer and Monsanto will merge into the largest chemical group in the world.
Wouter Job
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.