Monsanto and Bayer both confirmed late Wednesday that there’s been communication between the two companies about Bayer buying Monsanto.
If a deal between the two ag giants is reached, it would certainly have an impact on Canadian agriculture, particularly in the Western Canadian canola market.
RealAg’s Shaun Haney and Kelvin Heppner took some time on Thursday to discuss what an acquisition of Monsanto might mean when it comes to competition and product portfolios:
- Would Bayer be forced to put its market-share leading Invigor canola up for sale? The two companies currently 95% of the canola trait business. (And who would be in the game to buy it? Ahem, BASF or Syngenta…).
- The two companies’ corn and soybean portfolios could compliment each other — Monsanto has seed, Bayer has herbicides.
- What about the negative perception surrounding Monsanto’s brand in Bayer’s home country of Germany and among the anti-ag technology crowd? Could it affect a deal?
- Monsanto has long been the acquirer of other companies. What kind of offer would it take for the Board of Directors and people involved to agree to be bought? With market valuations in the range of $40+ billion, there’s talk of the purchase price being near $60 billion.
- How would cultural differences between the American and German businesses shape the new business?
Of course, there’s no guarantee a deal will be reached, nor what the terms would be, but it’s an interesting scenario, whether it goes ahead or not.