Bayer and Monsanto: A corporate marriage made in heaven or a problematic union from the start? German-based Bayer group ended weeks of speculation by confirming its unsolicited bid for Monsanto, the controversial American seed company in a move that stirs up a new round of rumors and potential controversy.
The deal was initially released to the media by Monsanto on Wednesday, leaving Bayer to confirm the move later that evening. Neither party has released any details of the bid, however, Monsanto's market capitalization amounts to $42 billion USD. Experts quoted by Reuters estimated the bid somewhere between 50 billion and 65 billion euros ($55 billion to $73 billion USD). Monsanto is currently reviewing the Bayer proposal with the advice of Morgan Stanley, Ducera Partners, and legal firm Wachtell, Lipton, Rosen & Katz.
With Bayer as the world's second largest producer of crop chemicals and Monsanto the world leader in seed sales, the combined company would become the largest supplier of agricultural products on the planet. A New York Times story pegs the combined annual revenue of the resulting super company at over $67 billion USD. The sale would also help to consolidate the global pesticide and seed markets.