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Bayer to Buy Monsanto Creating World's Largest Seed and Pesticide Company
Monsanto has finally agreed to be purchased by Bayer AG in a historic $66 billion all-cash takeover. The agreement, which both corporations have confirmed, will form the largest seed and pesticide company in the world.
The German pharmaceuticals and chemicals giant had been courting the St. Louis-based seed maker for roughly four months, with the aspirin-maker sweetening the pot with
ever-growing sums of money. Bayer finally plans to pay $128 a share for Monsanto, up from its initial May offer of $122 a share.
Not only is this the largest foreign corporate takeover ever by a German firm, it's the largest cash bid on record, as Reuters reported. A successful merger would create the world's largest agrichemical firm, which will control more than one-fourth of the combined global market for seeds and pesticides.
According to Bloomberg, "The deal gives Bayer more than 2,000 varieties of seeds for crops such as corn, soybeans, and wheat. Adding that portfolio to its own vegetable, rice, cotton and oilseed offerings give Bayer a virtually unassailable position at the head of the market."
The Monsanto-Bayer combination is yet another example of the rapidly consolidating agricultural industry, with only a handful of companies controlling the sector. Alongside slumping crop prices, DuPont Co. and Dow Chemical Co. have agreed to merge, as did China National Chemical Corp. and Syngenta AG.
Bayer CEO Werner Baumann and Monsanto Chairman and CEO Hugh Grant, appeared in a joint announcement of the proposed combination on their "Advancing Together" website. In their statements, both chiefs echoed Big Ag's oft-repeated sentiment that biotechnology helps increases crop yields in an environmentally friendly way and is one solution to feeding a growing global population.
"We are fully committed to helping solve one of the biggest challenges of society, and that is how to feed a massively growing world population in an environmentally sustainable manner," Baumann said. "What we do is good for consumers. We help produce efficient, safe, healthy and affordable food. It is also good for our growers because they have better choices to increase yields in a sustainable way."
Dave Murphy, the executive director of Food Democracy Now!, refutes this belief. "Agricultural biotechnology has never been about 'feeding the world,' but enriching the bottom line of toxic chemical corporations that have had a long history of producing chemicals that are deadly to human populations and the environment," he told EcoWatch.
Monsanto, the world's largest producer of genetically modified (GMO) crops and maker of the glyphosate-based herbicide Roundup, has faced mounting controversy and numerous lawsuits in recent years over the health and environmental impacts of its products.
Bayer has also been subject to criticism over its widely used insecticide, imidacloprid, which belongs to a controversial class of chemicals called neonicotinoids that's linked to widespread deaths of pollinators.
On today's landmark news, Murphy said: "Now the most evil company in Europe has absorbed the most evil company in America. Monsanto and Bayer's new corporate motto should be 'Killing bees and butterflies for fun and profit.'"
The Monsanto takeover is an interesting move for the German company. Although GMOs are widely grown in the U.S. and in other countries, the topic is fraught with contention in Europe. Many European Union countries have strict laws against GMOs due to public health and environmental concerns. Germany itself discourages the cultivation of GMO crops.
The BBC reported that farming groups are concerned that the deal could lead to fewer choices and higher prices for farmers.
"Bayer's acquisition of 'Frankenstein' crop producer Monsanto could be a horror story for both Bayer and its customers: the farmers," professor John Colley of Warwick Business School in England told the publication. "The farmers will lose out as product ranges are rationalized and attempts are made to increase prices."
Several consumer advocates and environmental organizations have denounced the acquisition for similar reasons.
"Today, Bayer announced it has agreed to buy Monsanto, another devastating merger that's bad for farmers, the environment and consumers," Wenonah Hauter, the executive director of Food & Water Watch, said. "Consolidation in the agrochemical industry means that farmers get paid less for their crops, more pesticides are used and there are fewer options for consumers at the grocery store. It's past time for the Department of Justice to do its job and enforce anti-trust measures to support healthy competition in the ag industry."
"With this deal Big Biotech gets bigger; it means monopoly power for Bayer-Monsanto, just like the previous mergers of Dow and DuPont and Syngenta and ChemChina," Ken Roseboro, the editor and publisher of The Organic & Non-GMO Report, told EcoWatch. "These three companies will dominate the global seed and pesticide markets and will likely drive up costs for farmers. The Justice Department should stop these mergers because they are bad farmers, bad for agriculture, and bad for consumers."
Critics of the tie-up have noted that Monsanto's poor image was a factor in its decision to be bought.
"The merger of Bayer and Monsanto should make the connection between Big Pharma, Big Biotech and Big Food all the more apparent to consumers," Ronnie Cummins, the international director of the Organic Consumers Association, told EcoWatch. "This may be a move to take pressure off the manufacturer of glyphosate, the most profitable pesticide in the world. But it really doesn't matter who manufactures or sells glyphosate, or any other dangerous chemical. The damage to human health and the environment remains the same, as does our commitment to getting these chemicals out of our food system."
"MoBay supplied ingredients for Agent Orange in the Vietnam War. Around 20 million gallons of MoBay defoliants and herbicides were sprayed over South Vietnam. Children are still being born with birth defects, adults have chronic illnesses and cancers, due to their exposure to MoBay's chemicals," she wrote. "Monsanto and Bayer's cross-licensed Agent Orange resistance has also been cross-developed for decades. Wars were fought, lives lost, nations carved into holy lands — with artificial boundaries that suit colonization and resource grab—while Bayer and Monsanto sold chemicals as bombs and poisons and their brothers provided the loans to buy those bombs."
"More recently, Bayer CropScience AG and Monsanto are believed to have entered into a long-term business relationship," Shiva continued. "This gives Monsanto and Bayer free access to each other's herbicide and paired herbicide resistance technology. Through cross-licensing agreements, mergers and acquisitions, the biotech industry has become the I.G. Farben of today, with Monsanto in the cockpit."
Monsanto and Bayer intend to file relevant materials with the U.S. Securities and Exchange Commission. Analysts are now turning their attention to the legality of the purchase and whether or not it could escape regulatory hurdles. Bayer, which expects to close the deal by the end of 2017, will pay Monsanto a break-up fee of $2 billion if the deal is not completed.
According to Reuters, Bernstein Research analysts believe that the merger has only a 50 percent chance of securing regulatory clearance. However, they cited a survey among investors that pushed the likelihood to roughly 70 percent.
"We believe political pushback to this deal, ranging from farmer dissatisfaction with all their suppliers consolidating in the face of low farm net incomes to dissatisfaction with Monsanto leaving the United States, could provide significant delays and complications," they wrote in a research note.
Meanwhile, Monsanto's tribunal at The Hague next month is still on deck. The Organic Consumers Association, IFOAM International Organics, Navdanya, Regeneration International and Millions Against Monsanto, joined by dozens of global food, farming and environmental justice groups are putting the transnational corporation on trial for crimes against nature and humanity and ecocide.
"The proposed buyout of Monsanto by Bayer does nothing to alter or weaken the upcoming Monsanto Tribunal, which will take place Oct. 15-16 in The Hague," Cummins said. "The buyout won't be completed by then. More important, the advisory opinions that will be issued by the five international judges will be applicable to all agribusiness companies, including Bayer."
EcoWatch Daily Newsletter
By Patti Lynn
2018 was a groundbreaking year in the public conversation about climate change. Last February, The New York Times reported that a record percentage of Americans now believe that climate change is caused by humans, and there was a 20 percentage point rise in "the number of Americans who say they worry 'a great deal' about climate change."
England faces an "existential threat" if it does not change how it manages its water, the head of the country's Environment Agency warned Tuesday.
By Jessica Corbett
A new analysis revealed Tuesday that over the past two decades heat records across the U.S. have been broken twice as often as cold ones—underscoring experts' warnings about the increasingly dangerous consequences of failing to dramatically curb planet-warming emissions.
By Madison Dapcevich
Ask any resident of San Francisco about the waterfront parrots, and they will surely tell you a story of red-faced conures squawking or dive-bombing between building peaks. Ask a team of researchers from the University of Georgia, however, and they will tell you of a mysterious string of neurological poisonings impacting the naturalized flock for decades.
The initial cause of the fire was not yet known, but it has been driven by the strong wind and jumped the North Santiam River, The Salem Statesman Journal reported. As of Tuesday night, it threatened around 35 homes and 30 buildings, and was 20 percent contained.
The unanimous verdict was announced Tuesday in San Francisco in the first federal case to be brought against Monsanto, now owned by Bayer, alleging that repeated use of the company's glyphosate-containing weedkiller caused the plaintiff's cancer. Seventy-year-old Edwin Hardeman of Santa Rosa, California said he used Roundup for almost 30 years on his properties before developing non-Hodgkin's lymphoma.
"Today's verdict reinforces what another jury found last year, and what scientists with the state of California and the World Health Organization have concluded: Glyphosate causes cancer in people," Environmental Working Group President Ken Cook said in a statement. "As similar lawsuits mount, the evidence will grow that Roundup is not safe, and that the company has tried to cover it up."
Judge Vince Chhabria has split Hardeman's trial into two phases. The first, decided Tuesday, focused exclusively on whether or not Roundup use caused the plaintiff's cancer. The second, to begin Wednesday, will assess if Bayer is liable for damages.
"We are disappointed with the jury's initial decision, but we continue to believe firmly that the science confirms glyphosate-based herbicides do not cause cancer," Bayer spokesman Dan Childs said in a statement reported by The Guardian. "We are confident the evidence in phase two will show that Monsanto's conduct has been appropriate and the company should not be liable for Mr. Hardeman's cancer."
Some legal experts said that Chhabria's decision to split the trial was beneficial to Bayer, Reuters reported. The company had complained that the jury in Johnson's case had been distracted by the lawyers' claims that Monsanto had sought to mislead scientists and the public about Roundup's safety.
However, a remark made by Chhabria during the trial and reported by The Guardian was blatantly critical of the company.
"Although the evidence that Roundup causes cancer is quite equivocal, there is strong evidence from which a jury could conclude that Monsanto does not particularly care whether its product is in fact giving people cancer, focusing instead on manipulating public opinion and undermining anyone who raises genuine and legitimate concerns about the issue," he said.
Many regulatory bodies, including the U.S. Environmental Protection Agency, have ruled that glyphosate is safe for humans, but the World Health Organization's International Agency for Research on Cancer found it was "probably carcinogenic to humans" in 2015. A university study earlier this year found that glyphosate use increased cancer risk by as much as 41 percent.
Hardeman's lawyers Jennifer Moore and Aimee Wagstaff said they would now reveal Monsanto's efforts to mislead the public about the safety of its product.
"Now we can focus on the evidence that Monsanto has not taken a responsible, objective approach to the safety of Roundup," they wrote in a statement reported by The Guardian.
Hardeman's case is considered a "bellwether" trial for the more than 760 glyphosate cases Chhabria is hearing. In total, there are around 11,200 such lawsuits pending in the U.S., according to Reuters.
University of Richmond law professor Carl Tobias told Reuters that Tuesday's decision showed that the verdict in Johnson's case was not "an aberration," and could possibly predict how future juries in the thousands of pending cases would respond.