Exclusive: Monsanto shows interest in Bayer's crop science unit - sources

Fri Mar 18, 2016 10:49pm EDT
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By Ludwig Burger and Mike Stone

(Reuters) - Monsanto Co (MON.N: Quote), the world's largest seed producer, has approached Bayer AG (BAYGn.DE: Quote) to express interest in its crop science unit, including a potential acquisition worth more than $30 billion, according to people familiar with the matter.

The move underscores Monsanto's unabated expansion drive after Switzerland's Syngenta AG (SYNN.S: Quote) rejected its takeover approaches last year and agreed earlier this year to be acquired by ChemChina for $43 billion.

It also illustrates Monsanto's determination to further consolidate its industry, as the global seed and crop protection market continues to suffer from high inventories and low prices for agricultural commodities.

Monsanto executives met in Chicago recently to discuss the company's interest in Bayer's agricultural assets, the sources said this week. Monsanto sees valuable synergies between its seed business and the crop protection assets of Bayer, the sources added.

Among the possibilities discussed were an outright acquisition of the crop science unit and a joint venture or other type of partnership between the two companies, the sources said. These talks were preliminary, and another meeting between the two sides has been scheduled for April, the sources added.

Bayer has been holding the talks with Monsanto to probe its interest, the sources said. The German company currently has no plans to actively pursue a sale of its crop science division, the sources added.

The sources asked not to be identified because the discussions were confidential. Monsanto and Bayer declined to comment.

Bayer’s crop science division has businesses in seeds, crop protection and non-agricultural pest control. It had sales of 10.4 billion euros ($11.7 billion) in 2015 and posted adjusted earnings before interest, tax, depreciation and amortization of 2.42 billion euros.   Continued...

File photo of a general view showing the annual general meeting of Bayer AG in Cologne April 27, 2012. REUTERS/Ina Fassbender