The U.S. Department of Justice approved the acquisition of Monsanto by Bayer. They are two of the largest agricultural companies in the world. As of June 7 Bayer is the sole owner.
According to Monsanto, its stock will no longer be traded on the New York Stock Exchange and its shareholders will be paid $128 per share. DOJ approval is subject to Bayer divesting itself from the German company BASF, the largest producer of chemicals in the world, and other assets to avoid antitrust issues.
The DOJ describes this as “the largest negotiated merger divestiture ever required by the United States.” Assistant Attorney General Makan Delrahim of the Antitrust Division said it “preserves competition in the sale of these critical agricultural products and protects American farmers and consumers”. There is more information about the merger at the DOJ website, justice.gov as well as at bayer.com and monsanto.com.
Monsanto, a company based in St. Louis, Missouri, may be best known for its controversial herbicide Roundup. When the deal is complete, the name Monsanto will be dropped from all of its current products. However, Bayer, a multinational pharmaceutical and agricultural company based in Leverkusen, Germany, says that it intends to keep the various product names currently owned by Monsanto. Bayer sells aspirin, fungicides, herbicides, insecticides and other products.
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Interesting consequences and issues
•For years there have been protests and legal cases against Monsanto from environmentalists, consumers and farmers in several countries for its products such as Agent Orange, glyphosate (Roundup), dioxin, polychlorinated biphenyls, and other chemicals and issues that some feel have harmed the environment. Its name has been associated with some Superfund sites. These are sites that have been designated by the U.S. government as contaminated with hazardous substances and pollutants. Taxpayer money is used to clean the sites.
The Environmental Protection Agency has more information about this at epa.gov. So, the name Monsanto has been a rallying point for protesters and it will be interesting to see what adjustments are made as there will no longer be a company with that name. Some speculate that this may be a reason why Bayer will drop the name.
•The Standard & Poor’s 500 said that Twitter, the social media company, will replace Monsanto on its index of top US public companies. Twitter’s stock increased following news of Bayer’s acquisition. More stock information is at the S&P site, spindices.com.
•Monsanto’s charity, the Monsanto Fund, has donated millions of dollars to charities and non-profit organizations since 1964. It says that in 2016 the amount was $24 million with several million dollars going to St. Louis-area organizations. Bayer says it plans to continue supporting the U.S. charities as does Al Mitchell, Monsanto Fund President. Information about the fund is at monsantofund.org.
•In response to the announcement, National Farmers Union President Roger Johnson said, “Bayer’s acquisition of Monsanto culminates the latest and most disturbing round of consolidation amongst the handful of companies that control both U.S. and global agricultural markets. Three massive companies now control the markets that supply agricultural inputs like seeds, traits and chemicals. This extreme consolidation drives up costs for farmers and it limits their choice of products in the marketplace.”
Johnson continued, “While we appreciate the significant divestitures agreed to as part of this approval, Farmers Union condemns DOJ’s continued rubber-stamping of mergers in the food and agriculture arena. We will now focus our efforts on ensuring the promises made by Bayer and Monsanto throughout this approval process are kept.”
The NFU fought to prevent the merger. Headquartered in Washington, D.C., it was founded in 1902 in Point, Texas, a city in Rains County. Their website is nfu.org.
Date: July 2, 2018
Source: navasotaExaminer