Bayer starts Monsanto integration as stock suffers

FRANKFURT AM MAIN: German chemicals and pharmaceuticals giant Bayer said that it would begin integrating seeds and pesticides maker Monsanto after a mega-merger, but its stock price was battered by the US firm’s legal woes.

Two months after the US$63 billion deal – the biggest ever foreign takeover by a German company – Bayer completed the sale of a final tranche of crop science businesses worth 5.9 billion euros (US$6.7 billion) to rival BASF under concessions imposed by cartel watchdogs.

With competition authorities’ conditions met, “the integration of Monsanto into the Bayer Group can begin,” the Leverkusen-based company said in a statement.

But any hoped-for honeymoon after the successful conclusion of the groups’ two-year courtship was over before it began.

Investors have shied away from Bayer’s shares since Monday, after a jury last week awarded a dying California groundskeeper almost US$290 million, finding that flagship Monsanto weedkiller Roundup caused his cancer.

Then California’s supreme court declined late Wednesday to hear Monsanto’s appeal against the state’s decision to list key Roundup ingredient glyphosate as a carcinogen.

Approaching 1500 GMT on Thursday, stock in Bayer was down 5.4 percent at 76.41 euros in Frankfurt, having lost over 18 percent this week.

In the groundskeeper’s case, “Bayer believes the jury’s decision is at odds with the weight of scientific evidence,” the group said in its statement Thursday, adding that Monsanto would appeal.

Bayer points to “scientific evidence, decades of real world experience and the conclusions of regulators around the world that all confirm glyphosate is safe”.

However the California ruling has shown juries can be convinced otherwise.

Around 5,000 other US court cases are pending, meaning the acquisition has left Bayer open to potentially massive legal costs estimated by analysts at up to US$10 billion. — AFP