Bayer, Monsanto said to be moving closer to deal
Negotiations between Bayer and Monsanto are advancing toward a deal after the companies made progress on issues including the purchase price and termination fee, people familiar with the matter said.
Bayer Chief Executive Officer Werner Baumann and his US counterpart Hugh Grant have had a series of constructive meetings in recent weeks, said the people, who asked not to be identified because the discussions are private. The companies, in talks to create the world's largest producer of seeds and pesticides, could reach an agreement in the next two weeks, said the people, who cautioned that negotiations could still fall apart or be delayed.
Leverkusen, Germany-based Bayer has been examining Monsanto's financial accounts as it weighs a new offer, people familiar with the matter said earlier this month. Monsanto in July rejected Bayer's improved $55-billion bid, describing the $125-a-share proposal as “financially inadequate.” An agreement would end months of back-and-forth that followed Bayer’s initial offer in May.
Representatives for Bayer and St. Louis-based Monsanto declined to comment.
Shares of Monsanto, which has a market value of about $46 billion, rose 4.1 per cent to $108.75 in pre-market trading in New York. Bayer shares gained 0.3 per cent to 96.13 euros as of 1:06 pm in Frankfurt, valuing the company at about $90 billion.
The global agricultural industry is being reshaped as farmers, hurt by lower commodity prices, spend less, pushing seed and chemical makers to consolidate. Dow Chemical and DuPont announced a plan in December to merge and then break into three entities, including a Monsanto-sized agriculture company. China National Chemical on Monday received approval may reduce competition in areas such as crop from US national security officials for its takeover protection, seeds and certain petrochemicals. of Swiss agrochemical and seeds company Syngenta said on Monday it's working closely Syngenta, seen as the biggest regulatory hurdle with “numerous regulators around the world,” that the $43-billion acquisition faces. and discussions remain “constructive.”
Approval for ChemChina's purchase of Baumann, who became CEO in May after Syngenta from the Committee on Foreign more than 20 years with Bayer, remains convinced Investment in the US has given fresh impetus to of the rationale of the combination and is Bayer's pursuit of Monsanto. Given that all three intent on getting the deal done despite initial disagreements agricultural deals will need antitrust approval, with Monsanto over the price, people there's an incentive not to be the last one seeking familiar with the matter had said. clearance as the market will already have been Monsanto may be willing to come to the table consolidated by the other deals. for $130 a share, Argus Research analyst Bill
Dow and DuPont face months of haggling Selesky said in June. Analysts at Sanford C with European Union regulators who opened an Bernstein said the company may decide to sell if in-depth probe to check whether the combination Bayer raises its offer to $135 a share. Canadian convenience store operator Alimentation Couche-Tard said on Monday it would buy US convenience store chain CST Brands in a deal valued at about $4.4 billion, boosting its presence in southeast United States.
San Antonio, Texas-based CST is one of the largest publicly traded fuel retailers in North America and also controls the general partner of gas station