Bayer To Buy Monsanto For $66B, Part Of A Trend Of Consolidation In Big Ag
RENEE MONTAGNE, HOST:
Bayer, the German company that makes aspirin made a big announcement this morning. It is buying Monsanto, the biotech pioneer based in St. Louis. The deal is huge, valued at $66 billion dollars. And if it goes through, approved by regulators, the combined companies will be one of the largest Agri-chemical companies in the world. Joining us now is NPR's Dan Charles who is on a reporting trip to a big agricultural show in Canada. Good morning.
DAN CHARLES, BYLINE: Good morning, Renee.
MONTAGNE: Now, this is just the latest deal among the big agricultural companies. This industry seems to be consolidating rapidly.
CHARLES: It is actually a remarkable wave of consolidation. There are three deals currently in the works. You know, DuPont and Dow are trying to merge. A company called Syngenta which is a big pesticide company based in Switzerland is being bought by the China National Chemical Corporation, and now comes Bayer buying Monsanto. Monsanto was already the largest seed company in the world. Bayer is very big in agricultural chemicals.
So we see kind of these global linkups between companies that are in the seed business and in the business of selling pesticides to farmers. If all of these deals go through, you would essentially have kind of a big three in that business. The combined Bayer-Monsanto, the combined Dupont-Dow and the China Chem-Syngenta.
MONTAGNE: And what are the implications for farmers and also other consumers who buy the products that these companies make?
CHARLES: For the Monsanto-Bayer deal, you know, Bayer obviously sells a lot of other things besides agricultural products. But Monsanto is really an agricultural company. So the impact of this acquisition would be, I think, primarily seen by farmers.
You know, visibly at the store or at the co-op - wherever they buy their products - it might not seem like anything changes because the same products will be on the market, but there will be fewer independent suppliers of, you know, the things that they need to produce their crops, the - you know, the pesticides and specifically the seeds.
In some cases already, Bayer and Monsanto are selling competing products, competing cottonseed, for instance, competing weed killers. And so there will be fewer independent suppliers and the fear is, of course, that that means higher prices, less competition.
MONTAGNE: You know, one thing big mergers like this seem to attract the interest of anti-trust regulators. What about this case?
CHARLES: They certainly will take a very close look at this. If this deal goes through, basically, the combined company would own 30 percent of the global seed business. American regulators will take a look at this but also regulators in other countries - in Europe, in Canada, in Asia and, you know, by the way, those other deals I mentioned, those are not done yet either. So there is increased scrutiny of this consolidation wave in the agricultural industry.
MONTAGNE: That's NPR's Dan Charles. Thanks very much.
CHARLES: Thank you, Renee.
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