Monsanto agrees to a $66 billion buyout with Bayer

The German pharmaceutical and chemical giant Bayer announced the acquisition of Monsanto, a seed, biotech and pesticide company known for its genetically modified organism work.

The buyout, confirmed by the companies on Sept. 14, was for $66 billion. Both companies have a presence in the Research Triangle Park that could be affected by the buyout.

Keith Edmisten, a professor of crop science at N.C. State, said the biggest concern for North Carolina will likely be the degree to which Bayer stays in the Triangle area.

“We have a lot of interaction in the university with research and some teaching with Bayer, so it’ll be sad if they move,” he said.

Julie Terry, marketing and special projects manager at the RTP, said in an email it is uncertain how this buyout will affect the park.

She said Bayer has about 1,000 employees locally, which makes it one of the largest employers in the RTP.

“Monsanto recently vacated a lab facility they owned here, but that was part of an effort on Monsanto’s part to consolidate research efforts to their St. Louis headquarters,” Terry said.

She said Bayer also has an education center at the RTP, called the Bee Care Center, where they work with N.C. State to study honeybee decline.

Edmisten said either company leaving the area could reduce local job opportunities for graduating biotech students.

“But I think eventually that as they work (the acquisition) out — the jobs just may not be local, they may be in St. Louis or somewhere else,” he said.

Before the deal, Bayer and Monsanto were two of the largest companies in the global seed and pesticide business, Edmisten said.

On a website designed specifically to describe the acquisition called Advancing Together, Bayer said the merger creates a global leader in agriculture.

Edmisten said the two companies complement one another.

“It merges a company with a strong chemical portfolio with a company that has a stronger biotech portfolio,” he said.

Bayer said they will pay $128 per share of Monsanto stock, which could reward stockholders with a healthy 44 percent return on investment, based on Monsanto’s May 9 stock value.

Edmisten said there have been many buyouts in the agriculture industry over the last 20 years, and that after the Bayer-Monsanto buyout, any more will be concerning.

Previous buyouts include the $43 billion ChemChina-Syngenta merger, and the $130 billion DuPont-Dow Chemical merger, both of which are still under regulatory review.

Edmisten said these companies are likely joining forces in order to keep up with the increasing costs of research and development, partially due to stricter regulations.

“They have to be safer, less toxic, not last as long in the environment — so less persistent,” he said. “So there’s always an investment in trying to find pesticides that not only work well but that are safer.”

Board of Management of Bayer AG Member Liam Condon said on the acquisition website, “The agriculture industry is at the heart of one of the greatest challenges of our time: how to feed an additional three billion people in the world by 2050 in an environmentally sustainable way.”

Edmisten said before the buyout is finalized, it will have to be approved by the Department of Justice to ensure that it will not result in a monopoly.

Bayer said on the acquisition website it expects the deal to close in late 2017.

“I think they will be the biggest (in the agricultural industry) after this merger,” Edmiston said.

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