Photographer: Daniel Acker/Bloomberg

Monsanto Bid Shows Courage Bayer Chairman Sees as Key to Success

  • ‘You need the courage to embrace change,’ Wenning says
  • Monsanto is ‘excellent opportunity’ to boost agriculture unit

Bayer AG’s Werner Wenning has a message for anyone questioning his company’s attempt at the biggest takeover in German corporate history.

“You need the courage to embrace change, if a company wants to survive long term amid global competition,” the supervisory board chairman said in written comments in response to questions. “I can think of many other companies that have secured their successes with profound changes.”

Monsanto last week rejected Bayer’s $62 billion buyout offer as too low, though the U.S. company said it’s open to further talks. Acquiring Monsanto would make Bayer the world’s biggest supplier of farm chemicals and seeds. The Leverkusen, Germany-based company’s top executives have been talking to investors and media to build support for the bid.

The foray has met a muted response from shareholders. Bayer has fallen about 10 percent since May 11, the day before Bloomberg News reported the proposed acquisition as investors speculated the deal would strain the company’s finances. That’s forced Bayer’s management to emphasize the merits of the combination, with Wenning calling the advantages “indisputable.”

‘Indisputable’ Benefits

“The planned Monsanto takeover would be an excellent opportunity for Bayer to strengthen its agricultural business strategically,” Wenning said. “The benefits of a combination are indisputable.”

Buying Monsanto would allow Bayer to tap growing demand at a time when farmers must boost productivity to feed an estimated 10 billion people globally by 2050. Merging Monsanto with the company that invented aspirin would bring together brands such as Roundup, Monsanto’s blockbuster herbicide, and Sivanto, a new Bayer insecticide.

“Bayer and Monsanto have been connected commercially via different license agreements for years,” Wenning said. “Each is aware of the competencies of the other, the companies are very complementary.”

The crop and seed industry is being reshaped by a series of large transactions that may end up leaving just a few global players who can offer a comprehensive range of products and services to farmers. China National Chemical Corp. agreed in February to acquire Syngenta for about $43 billion. Meanwhile DuPont Co. and Dow Chemical Co. plan to merge and then carve out a new crop-science unit.

At home, Bayer faces a backlash against the Monsanto deal because of two products from the St. Louis-based company that are widely detested in Germany: genetically modified seeds, which activists say carry potential health risks, and Roundup, which uses a compound called glyphosate that some believe can cause cancer.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE