Hello New Bayer!
June 4, 2018 Welcome to the consolidation club, new Bayer! Not too long ago, the Indian and U.S. governments finally signed off on the proposed acquisition of Monsanto by Germany-based Bayer. According to numerous news reports, Bayer expects to formally close this deal by before the middle of June (since Monsanto has the option to request “more money” if the acquisition hasn’t been finalized by June 14). Once done, the newly combined Bayer/Monsanto will be a $20 billion crop protection/seed giant – the largest such entity in the world by sales volume.
And also with this deal done, the formal downsizing of the crop protection/seed business that began in 2016 will finally be at a close. The new players will all be in place. At the top will be the companies directly involved in consolidating – the aforementioned Bayer, followed by Syngenta/ChemChina and Corteva (the combined Dow and DuPont) at just over $17 billion apiece.
Next in order will be the two companies that made significant asset acquisitions as their larger competitors shed some product lines, research facilities, and data platforms to gain regulatory approvals for their major deals. This includes BASF, which now will own many of the cast off Bayer products such as LibertyLink seeds and glufosinate herbicide, and FMC, which picked up plenty of products and R&D interests from DuPont before its merger.
Now that all the questions regarding crop protection/seed companies consolidating have apparently been answered, everyone is probably wondering what happens next? In the short term, these newly consolidated companies will likely spend a year or so fully integrating their personnel/assets/operations accordingly. Then, they will probably get back to the business of product innovation through research and development. As has been the case for the past several years, weeds, pests, and crop diseases continue to evolve into new forms that threaten to cause billions of dollars of damage and lost revenues for growers across the country. It will be interesting to see how some “new owners” handle such important legacy products such as glyphosate and dicamba/2,4-D cropping systems going forward.
Loading ...And perhaps some of the second-tier players in the crop protection market such as Albaugh, AMVAC, and Nufarm will start their own consolidation efforts that will take us into 2020. As always, stay tuned . . .
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