The Path Ahead For Mergers & Acquisitions In Agriculture
January 9, 2017 Bayer AG’s proposed $66 billion takeover of Monsanto would create, by far, the industry giant capturing more than a quarter of the world’s seed and agchem market, writes Jackie Pucci on AgriBusinessGlobal.com.
Based on size alone, “it’s hard for people to be dismissive of it,” says Garrett Stoerger, Partner at M&A advisory and consulting firm Verdant Partners. If it does go through, and it appears chances are good as overlap of the two businesses is limited to a few select crops, there are other questions — such as how to unify two disparate company cultures.
Dr. Werner Antweiler, Associate Professor at the University of British Columbia’s Sauder School of Business, recalled one very famous mega-merger of American and German companies from back in 1998, and the culture-clashing chaos that ensued. “Will this deal realize its full potential, or will it go the way of Daimler-Chrysler and flounder?”
“It’s far from clear to me the two cultures will be able to merge into a new approach that satisfies both sides. Without strong leadership from Bayer, they are at risk of repeating the same mistakes,” Antweiler tells AgriBusiness Global.
“Moreover, the Monsanto brand is more liability than asset, while the rich Monsanto R&D pipeline and patents, and Monsanto’s expertise on the agritech-IT (‘smart farming’) side are the most promising gains for Bayer.”
Commenting on the broader agchem backdrop of late, “There is a lot of skepticism; so many things are going on at the same time,” Rob Dongoski, Partner, Global Agribusiness Leader with Ernst & Young, says.
He’s right: The year felt like one long merger announcement, one of the last (at least for 2016, but we could be wrong) being the Agrium-Potash tie-up.
Read the full story on AgriBusinessGlobal.com.
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