Bayer Makes $62 Billion Play For Monsanto Germany's Bayer corporation says Monsanto is worth $62 billion. That works out to a 37 percent premium over Monsanto's stock price from a few days ago. Bayer is sending a signal it is serious about taking over Monsanto, and it's willing to take on a lot of debt in order to do so.
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Bayer Makes $62 Billion Play For Monsanto

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Bayer Makes $62 Billion Play For Monsanto

Bayer Makes $62 Billion Play For Monsanto

Bayer Makes $62 Billion Play For Monsanto

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Germany's Bayer corporation says Monsanto is worth $62 billion. That works out to a 37 percent premium over Monsanto's stock price from a few days ago. Bayer is sending a signal it is serious about taking over Monsanto, and it's willing to take on a lot of debt in order to do so.

ARI SHAPIRO, HOST:

Bayer may be best known as a company that makes aspirin. The German conglomerate also sells a lot of other products, though, including scenes and chemicals for farms. Today, Bayer announced that it wants to grow further by acquiring St. Louis-based Monsanto for $62 billion dollars. NPR's Jim Zarroli reports.

JIM ZARROLI, BYLINE: Bayer confirmed the news that was leaked to the press last week. It's made an offer to buy Monsanto, the agribusiness giant known around the world as a maker of genetically modified seeds. Monsanto hasn't yet responded, but if the deal goes through, it would create the world's largest provider of seeds and agricultural chemicals. Werner Baumann is Bayer's CEO.

WERNER BAUMANN: The proposed transaction is driven by a strong belief that while our industry has take on enormous challenges, this combination is a powerful response.

ZARROLI: The deal comes at a time when big mergers are radically reshaping the chemical industry. Dow Chemical and DuPont announced a $130 billion dollar-deal last December. At the same time, a decline in commodity prices and a drop in farm income is cutting into company profits. Radhakrishnan Gopalan is an associate professor of business at Washington University in St. Louis.

RADHAKRISHNAN GOPALAN: Monsanto is going through some difficult times given that the agriculture sector is not doing too bad. Their stock has fallen significantly. They are retrenching.

ZARROLI: Bayer officials argue that merging would save the company's money and make them more competitive. But the deal faces an uncertain regulatory environment in the U.S. and Europe. There is little product overlap between Bayer and Monsanto, but the deal would give the combined company greater control over the products farmers buy, and the deal faces skepticism on Wall Street.

Some investors are concerned that Bayer is taking on more debt than is good for it. And they worry that Bayer may have to sweeten the deal to gain Monsanto's support. Shares of Bayer were down today after the details of the deal were announced. Jim Zarroli, NPR News, New York.

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