Monsanto Was Just Bought by One of the World’s Biggest Pharmaceutical Companies

If the merger of Bayer and Monsato is approved, the megacorporation would control more than a quarter of the world’s seeds and pesticides.
September 15, 2016, 9:00pm
Photo via Flickr user Jill Watson

A new megalith of agribusiness is poised to soon form, with the German pharmaceutical company Bayer announcing that it will be buying the seed and pesticide producer Monsanto for a cool $66 billion in cash in what is the biggest all-cash deal on record. Monsanto has long been the target of anti-GMO activists who see the company as holding outsized influence over global food production and supply.

The deal still needs to undergo regulatory approval in about 30 jurisdictions around the world, and one analyst told Reuters that the merger has a roughly 50 percent chance of winning approval. If approved, the new company would control more than a quarter of the world's seeds and pesticides, according to the BBC.

"We are entering a new era in agriculture—one with significant challenges that demand new, sustainable solutions and technologies to enable growers to produce more with less," said Monsanto chairman and CEO Hugh Grant in a press release. "This combination with Bayer will deliver just that—an innovation engine that pairs Bayer's crop protection portfolio with our world-class seeds and traits and digital agriculture tools to help growers overcome the obstacles of tomorrow. Together Monsanto and Bayer will build on our proud tradition and respective track records of innovation in the agriculture industry, delivering a more comprehensive and broader set of solutions to growers."

Reached for comment, a representative of Monsanto referred to a suite of materials about the merger online.

READ MORE: We Spoke to a Monsanto Exec About Solving the World's Food Crisis

"In order to ensure food security for everyone in the future, namely to feed these almost 10 billion people, Bayer believes sustainable agriculture will be key," the primer on the deal read. "Sustainable agriculture is best achieved by collaborating in the areas of research, education and training."

In terms of Bayer's products and franchises, Americans are probably most familiar with its aspirin and the soccer teams Bayern Munich and Bayern Leverkusen, which are sponsored by the Leverkusen-based pharmaceutical giant. Bayer already makes a variety of pesticides, and the companies say that together they'll better help to feed a growing global population.

"Together we would draw on the collective expertise of both companies to build a leading agriculture player with exceptional innovation capabilities to the benefit of farmers, consumers, our employees and the communities in which we operate," Bayer Ceo Werner Baumann said in a press release.

The deal positions Bayer to stay on par with or ahead of its biggest industrial rivals. Chemical makers DuPont and Dow are currently joining forces, and earlier this week, the Potash Corporation of Saskatchewan merged with Agrium Inc, a large agriculture and fertilizer company. Earlier this year, a Chinese-government-owned chemical giant bought the seed and pesticide company Syngenta.

"Bayer's competitors are merging, so not doing this deal would mean having a competitive disadvantage," the fund manager Markus Manns of Union Investment told Reuters.

READ MORE: This GMO Scientist Plays God with Your Corn

What the pharmaceutical and agricultural giant would mean for farmers and consumers is unclear, though the company would be one of the world's largest producers of chemicals and agricultural products. It's also uncertain how Europeans, with a history of largely being vehemently anti-GMO, would react to the presence of the world's largest producer of GMOs within a European company. Monsanto's headquarters would remain in St. Louis, Missouri.

Farmers fear that increasing consolidation of chemical and agricultural products producers could raise prices for seeds and pesticides. Already, farmers are feeling the hurt this year as crop prices are down, making it difficult to purchase sufficient seeds and pesticides and in turn hurting agribusiness.

"Consolidation of this magnitude cannot be the standard for agriculture, nor should we allow it to determine the landscape for our future," the National Farmers Union president Roger Johnson said in a statement. "We will continue to express concern that these megadeals are being made to benefit the corporate boardrooms at the expense of family farmers, ranchers, consumers and rural economies."