Bayer Investors React to the Monsanto Acquisition

Dan General, Industry News Release, Seeds

A Dow Jones Report says investors generally seem positive about the deal struck by Bayer CEO Werner Baumann to acquire Monsanto. The head of a global equities asset management company in Paris that invests in Bayer said, “So far, he’s proven to be quite a good negotiator. He’s been very efficient.” Markus Manns, a portfolio investor at Union Investment, another Bayer shareholder, said Baumann has shown that he won’t spend money recklessly just to get the deal done. “I’m a little more optimistic,” he added. Investors are particularly pleased with how the financing worked out. Baumann took advantage of access to debt at very low interest rates to largely pay for the deal, which would allow the new company to quickly grow its earning potential. There is some uncertainty that the deal will get regulatory approval from roughly 30 agencies around the world, and the fact that Bayer will pay Monsanto $2 billion if the deal falls through. A professor at the Frankfurt School of Finance and Management said just closing the deal is not a sign of success. “It’s going to depend on whether or not he can turn this acquisition into reality,” said Professor Nils Stieglitz.

From the National Association of Farm Broadcasting news service.