Agriculture

Monsanto-BASF talks smell like a red herring

14 Jul 2016

The besieged U.S. seedmaker is reportedly in talks about buying the German group's agrochemicals unit. A deal could see off Bayer's $62 bln bid for Monsanto. Persuading BASF to sell will be tricky. Still, the gambit might be a way of forcing Bayer to sweeten its offer.

Monsanto’s bid defense withers on the vine

29 Jun 2016

The U.S. seedmaker’s disappointing third-quarter performance makes it hard to see how Monsanto can lure chemical group Bayer into sweetening an already frothy $62 bln offer. The suitor may be willing to look past a cyclical dip, but its negotiating position now looks stronger.

Bayer-Monsanto could be squeezed in hungry world

3 Jun 2016

Population growth and climate change will boost demand for seeds and agrichemicals. Bayer's strategic rationale for a $62 bln Monsanto bid looks sound. But if food shortages really bite, the merged group's pricing power may come under attack. There are precedents in pharma.

Bayer’s Monsanto bid yields poor financial harvest

27 May 2016

The German chemicals group’s rejected $62 bln offer for the seed maker already appeared to violate one of its key principles: stick to projects whose returns beat the cost of capital. Upping the price to win over Monsanto would take heroic sales-growth assumptions to stack up.

Monsanto can push Bayer only so far

24 May 2016

The U.S. seed producer rejected a $62 bln offer from the German chemical giant, but said it was open to talks. Bayer’s shareholders reacted poorly to the initial bid while Monsanto investors are skeptical about chances for a deal. Negotiating power is limited on both sides.

Bayer’s synergy hopes fall on stony ground

24 May 2016

The German pharma group’s stock fell more than $14 billion as it made an approach for U.S. seed maker Monsanto. It’s almost as much as the premium Bayer is offering, and suggests shareholders expect next to no cost savings. The deal looks value destructive, but that seems harsh.

Monsanto may strain to make case against Bayer bid

23 May 2016

A $62 bln all-cash offer from the German titan exploits a cyclical downturn in global agrochemicals. Even if Monsanto’s profit picks up again as expected, however, investors would have to value it considerably higher to match the takeover price. The bird in hand will be tempting.

Bayer’s Monsanto bid flags conglomerate curse

23 May 2016

Agro giants will have to wait for Malthus boost

23 May 2016

Tougher U.S. laws on tax inversions are one reason why Dutch fertiliser group OCI’s merger with CF Industries is off. But with supply outstripping demand, fertiliser prices are also falling. That’s delaying the price hikes that should come from rising populations.

BASF best leaving Monsanto seeds for the birds

19 May 2016

Bayer’s bid for the U.S. seed maker puts its German rival on the spot. Monsanto and BASF work together on research and there are few other potential merger partners. Yet the maths of a $50 bln-plus counterbid would be a stretch. BASF has sat out other big deals; it can again.

Bayer would risk choking on Monsanto

12 May 2016

The $94 bln German chemical giant may be mulling a bid for the U.S. seed maker. Monsanto, worth $39 bln, would need convincing. A deal pitched at a 30 pct premium is financially feasible, but Bayer would need to raise a lot of cash – and deal with clashing cultures.

Monsanto CEO puts M&A-addicted peers to shame

7 Apr 2016

Hugh Grant walked away from buying pesticide company Syngenta last year rather than overpay. Now he’s swearing off the biotech seed maker doing big deals. Choosing organic growth over ill-fitting, frothy tie-ups is a smart move that more bosses ought to put on their to-do list.

India cotton seed spat sows bigger trouble

31 Mar 2016

The government’s move to cap the fees Monsanto can charge for licensing its technology for genetically modified seeds looks short-sighted. It rekindles old fears about India’s cavalier attitude to intellectual property and gives big foreign firms another reason to stay away.

Dow-DuPont deal would be tough nut for interlopers

7 Mar 2016

German chemical giant BASF may be considering a counterbid for U.S. rival DuPont. The price would have to include a whopping premium – and cover a $1.9 bln break fee. The tax benefits alone could make the agreed-upon $130 bln union and spinoff with Dow Chemical close to ironclad.

Brexit more complex than big versus small business

24 Feb 2016

The assumption is listed firms will vote to stay in the EU, while red-tape-throttled small firms will not. But only a third of the FTSE 100 signed a letter backing Brexit. A glance at UK farms’ subsidies, labour and low tariffs suggests many small firms will vote to remain. 

Baltic Dry’s economic compass looks wet

16 Feb 2016

The indexed cost of shipping grains and minerals has hit record lows. While its prescience in 2008 may renew fears of a sharp global slowdown, the Baltic Dry has become a far less reliable health indicator. China’s troubles are partly to blame for the fall, but so are too many ships. 

ChemChina can reap rewards of new stance on GMOs

4 Feb 2016

Buying Syngenta will thaw China’s hostility towards genetically modified organisms. Nationalist fears about food safety will ring hollow once the seeds are in Chinese hands. The buyer will be able to push into a huge new market – but so, in time, will rivals like Monsanto.

Syngenta up against element of regulatory surprise

3 Feb 2016

The Swiss seed maker says its $43 bln sale to ChemChina shouldn’t raise U.S. national security fears, despite hot-button facets like chemicals, food and China. Yet Philips’ blocked lighting-unit deal shows Uncle Sam can veto without explanation. That’s reason enough to be wary.

Syngenta deal has two big winners, 1.4 bln losers

3 Feb 2016

ChemChina’s $43 bln cash takeover of the Swiss seed maker won’t involve job cuts, management sackings or cheeky tax reduction. Great for Syngenta shareholders and employees; not so for the buyer. Fortunately, the cost is spread widely – among China’s unwitting savers.

ChemChina’s Syngenta bid is prickly for Monsanto

2 Feb 2016

The state-owned group is nearing a $42 bln deal for the Swiss seeds and pesticides group. The cash and friendly nature make it better than a similarly valued offer from Monsanto. The U.S. company could improve its bid or turn its attention to BASF. Neither M&A option looks easy.