Monsanto, once M&A instigator, now in awkward role as possible target

Thu May 12, 2016 10:40pm EDT
 
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By Karl Plume and Ludwig Burger

(Reuters) - A year after Monsanto Co sparked a massive consolidation race in the agrochemical industry by bidding for a rival, the world's largest seed company now finds itself in the uncomfortable role of takeover target.

Monsanto shares rallied as much as 12 percent on Thursday on new reports that Bayer AG and BASF SE were interested in the St. Louis-based company, highlighting the drive for more marriages in the sector.

Bloomberg News reported Bayer was exploring a bid for Monsanto, while financial news website Street Insider reported that BASF was looking at a Monsanto acquisition.

Monsanto, Bayer and BASF all declined to comment.

Talk of such deals has swirled for months as Monsanto faced mounting corporate woes and rivals met with advisers to weigh various deal combinations.

Both Bayer and BASF have been exploring tie-ups with Monsanto for several months, but valuation concerns have made a deal elusive, people familiar with the matter told Reuters on condition of anonymity.

The sources said both were concerned about the price Monsanto shareholders would want, emboldened by recent deals.

Consolidation has been spurred by high inventories and low prices for agricultural commodities.   Continued...

 
Monsanto is displayed on a screen where the stock is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 9, 2016. REUTERS/Brendan McDermid