Monsanto: Bayer's Acquisition Will Fail (And Monsanto Will Receive $2 Billion)
Sep. 19, 2016 5:00 AM • MON
Investors' reaction to Bayer's announced acquisition of Monsanto for $128 a share in cash was so poor that Monsanto shares are trading almost $25 below the announced acquisition price.
Investors' poor response to such acquisition recognizes the battle each of the companies face with respect to objections to such acquisition by antitrust regulators.
Antitrust regulators and farmers are rightly concerned that the consolidation of the major agricultural companies will increase industry profits but increase farmer/consumer costs as well.
If Bayer/Monsanto, Dow Chemical/DuPont and ChemChina/Syngenta merge, 3 companies would control 70 percent of the global pesticide market and 80 percent of the U.S. corn-seed market.
We believe antitrust regulators will block Bayer's acquisition of Monsanto, but potential Monsanto investors will still benefit from long-term population/wealth trends favoring the company