Bayer is all set to complete the acquisition of Monsanto on June 7, after receiving the required approvals from regulatory authorities. The deal is expected to double the share of Bayer’s agriculture business.

United States: Bayer has announced its plans of completing the acquisition of Monsanto on June 7, as it receives all the required approvals from regulatory authorities. The Chairman of the Board of Management of Bayer AG claimed that acquisition of Monsanto is being touted as a strategic milestone in strengthening the company’s portfolio in health and nutrition and double the size of its agriculture business.

The acquisition is part of a multiyear transformation, as Bayer sold off its legacy plastics business and remade itself into a life-science company with roughly half its sales from medicines and half from agriculture. It’s the third in a series of mega-deals in the industry, following Dow Chemical Co.’s merger with DuPont Co. and China National Chemical Corp.’s takeover of Syngenta AG.

Bayer believes the acquisition is likely to generate significant value and expects a positive contribution to core earnings per share starting from 2019. From 2021, the contribution is projected to be double-digit percentage.

Bayer has agreed to the divestiture of businesses which generated 2.2 billion euros in sales in 2017 for an aggregate base purchase price of 7.6 billion euros. The Pharmaceutical giant will be the sole shareholder of Monsanto from June 7.

As per the conditional approval from the United States Department of Justice, the integration of Monsanto into Bayer is likely to happen as soon as the divestments to BASF have been completed.

Bayer has been meticulously preparing for the acquisition over the past two years after announcing its intention of acquiring Monsanto in May 2016. Bayer had also signed an agreement with the Monsanto for USD 128 per share in the September of 2016.

Bayer will remain the company name and Monsanto is likely to disappear. However, the products acquired are likely to retain their brand names but will become a part of the Bayer portfolio.

Bayer secured initial bridge financing of USD 57 billion to acquire Monsanto. The company announced in September 2016 that it is being refinanced by a combination of equity and debt transactions, some of which have already been completed. The final equity measure will be a rights issue, which was recently announced.

According to TechSci Research, the acquisition of Monsanto will transform Bayer into the world’s biggest maker of seeds and agricultural chemicals. The deal is likely to double the share of Bayer’s agriculture business. The deal is likely to have a positive impact on the agrochemicals market as well as seeds market globally. The emerging need to raise agricultural yield and crop produce to address food security issues is expected to drive the growth of agrochemicals like insecticides and pesticides globally. Moreover, the rising need of substituting the hazardous and expensive synthetic pesticides with environment-friendly and inexpensive substitutes will drive the growth of Bio-pesticide Market in the coming years. The seed treatment market is also expected to witness robust growth globally in the future.

According to the recently published report by TechSci Research, “Global Pesticides Market, By Type (Synthetic Pesticides and Bio pesticides), By Application (Cereals, Fruits, Plantation Crops, Vegetables, etc.), By Formulation (Dry Formulation & Liquid formulation), By Region, Competition Forecast and Opportunities, 2013-2023”, Global Pesticides market stood at USD68.72 Billion during 2017 and is expected to surpass USD85.25 Billion by 2023, growing at a CAGR of 5.79% during the forecast period. The emerging need to raise agricultural yield and crop produce to address food security issues is primarily driving the global pesticides market. Moreover, the adoption of GM technology, resulting in herbicide and insect resistant crop strains are boosting the sales of pesticides worldwide. Consequently, the decreasing arable land, burgeoning population and adoption of eco-friendly pesticides are some of the factors which would augment the demand for pesticides globally over the coming years.

According to the recently published report by TechSci Research, “Global Bio Pesticides Market, By Type (Bio insecticides, etc.), By Crop Type, By Application (Seed Treatment, etc.), By Origin (Beneficial Insects, etc.), By Formulation, By Region, Competition Forecast and Opportunities, 2012-2026”, The global bio pesticides market stood at $ 2.45 billion in 2016 and it is projected to reach $ 11.3 billion by 2026, exhibiting an aggressive CAGR of more than 16% during the outlook period. The growth in the global bio pesticides market is expected on account of various promotional activities carried out by government agencies and groups to replace the hazardous and expensive synthetic pesticides with environment-friendly and inexpensive substitutes. In addition to this, increasing food security issues across the globe due to population outburst is further supporting the demand for bio pesticides in developing as well as developed nations. Major agrarian economies such as India, Brazil, etc., are extensively adopting sustainable crop protection products and pesticides in their farming methods, which is anticipated to drive the global bio pesticides market over the coming years.

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