Bayer: 62 billions and some doubts to afford Monsanto
Germany's Bayer unveiled the amount of its takeover bid for the world's leading seeds company, with whom it wants to create a giant of agrochemistry. But the operation is still far from being achieved.
After several days of rumors, Bayer finally unveiled his game and announced to have put 62 billion dollars (55 billion euros) on the table to buy Monsanto. The German chemistry-pharmacy group revealed on Monday the outlines of its offer to merge with the American specialist in seeds and GMOs. Which would make it one of the biggest operations of the year in the world.
"Bayer has made a cash offer to buy all Monsanto shares for 122 dollars per share or a total value of 62 billion," says the German company in a statement. By setting such a price, he indicates that he is offering Monsanto shareholders a bonus of 37% over the share price of the US group 9 May, the day before the offer.
Investor Skepticism
Except that, since the Monsanto share price has benefited a lot from the first rumors of merger. Which might have to push the German to outbid this first proposal. However, if he says he is "highly confident" in his ability to finance such an operation, referring to the possibility of a capital increase, Bayer is already very heavily indebted.
"If the price were to increase, which we must assume, the redemption will become an operation less and less attractive," fears the mutual fund German Union Investment, shareholder of Bayer. On Friday already, another shareholder, the Henderson Global Investors fund, publicly criticized the merits of the deal and its impact on the group.
Since the revelation of his interest for Monsanto, the title of the chemist has declined to reach its lowest level since October 2013, knowing even its worst fall in seven years on the day of Thursday, when he announced to have sent an offer to leaders from Monsanto.
http://www.lesechos.fr/industrie-services/energie-environnement/021956006805-bayer-fait-une-offre-dachat-de-62-milliards-de-dollars-sur-le-geant-monsanto-2000470.php
Here is a good example of monopolization phenomenon, the (possible) merger between two giants of agro-chemistry.
Bayer is already a beautiful baby:
During the 2015 exercise, Bayer had close to 117 000 people and achieved a turnover of 46,3 billion. Its investments amounted to 2,6 billion euros, and the Group has devoted 4,3 billion euros to R&D. These figures include those for the High Performance Polymers activity, which has become Covestro, an independent company listed on the stock exchange since October 6, 2015.
Monsanto is not left out:
En 2012, Monsanto achieved a turnover of 13,5 billion, growing 14% over 2011, which positions it as one of the world's leading suppliers of agricultural supplies, crop protection and seeds.
We would have a group super-monopolistic which foreshadows what could be a futus "TAFTAien" (in reference to the transatlantic treaty).
What about the power of such a group?
What are decision-making powers within the EU?