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Pity Monsanto, the genetically modified seed and agrichemical giant. Its share price has plunged 25 percent since the spring. Market prices for corn and soybeans are in the dumps, meaning Monsanto's main customers—farmers who specialize in those crops—have less money to spend on its pricey seeds and flagship herbicide (which recently got named a "probable carcinogen" by the World Health organization, spurring lawsuits).
Monsanto's long, noisy attempt to buy up rival pesticide giant Syngenta crumbled into dust last month. And Wednesday, Monsanto reported quarterly revenues and profits that sharply underperformed Wall Street expectations. For good measure, it also sharply lowered its profit projections for the year ahead.
originally posted by: glend
If true, its the best news I have head for a long time. I consider Monsanto, one of the biggest threats to life on our planet.
Bayer's potential acquisition of Monsanto would create a giant seed and farm chemical company with a strong footprint in the U.S., Europe and Asia, combining two businesses with complementary geographical focus.
But Bayer might have to shed part of its business because of anti-trust concerns. And the price tag on any deal would be huge: Monsanto's market value is around $42 billion.
Germany-based Bayer AG said Thursday in a short statement that its executives had met recently with their Monsanto counterparts "to privately discuss a negotiated acquisition" of the specialist in genetically modified crop seeds.
A Monsanto statement said that its board was reviewing the proposal, which is subject to due diligence, regulatory approvals and other conditions. There is no assurance that any transaction will take place, it added.
Bayer shares dropped more than 8 percent to a 2-1/2 year low of 88.39 euros in early Thursday trading, with some investors worried by the potential cost of a deal.
Monsanto shares were seen 7.6 percent higher at $104.50 in pre-market trades.
UBS Global Asset Management, which Reuters data shows is among Bayer's 30 biggest investors, said it was "deeply concerned" about the burden on Bayer's finances from a takeover, saying it would prefer the companies to agree a joint venture or a nil-premium merger.