Bayer Soars as Monsanto Takeover Inches Closer to Finish LineBy and
Agreement in principle reached between companies, WSJ reports
Bayer’s $66 billion deal would be largest in the industry
Bayer AG rose the most in more than a year as the German company inches closer to completing the $66 billion acquisition of Monsanto Co., with a report of U.S. antitrust approval coming less than three weeks after European clearance.
The two companies have the green light from almost two-thirds of the jurisdictions that need to sign off on the biggest transaction in the seeds and crop-chemicals industry. The U.S., Russia and India remain, and on Monday the Wall Street Journal said the U.S. Department of Justice had decided to consent to the takeover, sending Monsanto shares higher on optimism about approval.
An agreement in principle has been brokered between the two companies in recent days, the newspaper reported, citing people familiar with the matter. That marks a breakthrough for the review process, as just last month, Justice Department officials weren’t satisfied with Bayer’s plan because of concerns that the transaction could hurt competition, two people familiar with the matter told Bloomberg News at the time.
Bayer shares climbed as much as 5.5 percent, the most since November 2016. The stock traded at 97.75 euros at 9:17 a.m. in Frankfurt.
The German company’s proposed takeover of St. Louis-based Monsanto is part of a wave of consolidation that has swept seed and crop-chemical firms in the past three years. Two previous deals, the combination of Dow Chemical Co. and DuPont Co. and China National Chemical Corp.’s takeover of Syngenta AG, won antitrust clearance.
Bayer, which is based in Leverkusen, Germany, had previously agreed to sell seed-and-agrochemical assets to BASF SE for $7 billion. BASF is also in talks to buy Bayer’s vegetable seed business.
In its review of the Bayer-Monsanto merger, the Justice Department is looking at horizontal antitrust issues, or competition in the same market, as well as vertical competition, or issues along supply chains, one of the people familiar with the plan said.
A spokeswoman for Monsanto and a Bayer spokesman both declined to comment on the Wall Street Journal’s report. Monsanto said last week that the deal will be wrapped up by June.
Monsanto rose 6.2 percent to $125.15 in New York on Monday. Bayer’s all-cash deal values the company at $128 a share.
— With assistance by Lydia Mulvany