US to allow Bayer's Monsanto mega-deal takeover

SOT
April 25, 2018


The Justice Department has decided to allow Bayer AG's megadeal to acquire Monsanto Co., valued at more than $60 billion, after the companies pledged to sell off additional assets to secure government antitrust approval, according to people familiar with the matter. 


An agreement in principle between the companies and the department, brokered in recent days, marked a breakthrough in the U.S. merger review process, which had remained in limbo because of Justice Department concerns about the deal. 

Monsanto shares rose more than 6% in recent trading after The Wall Street Journal reported on the Justice Department's decision. 

Bayer Chief Executive Werner Baumann and Monsanto CEO Hugh Grant recently met with Justice officials in Washington to help secure an agreement, people familiar with the matter said. 

The Bayer deal presented the Justice Department with its second major merger decision under Trump administration leadership, following its move last November to challenge AT&T Inc.'s acquisition of Time Warner Inc., a case that is currently in trial. 

Deal makers and investors remain eager for more data points on the administration's approach, but there does appear to be one common thread between the two decisions. In each transaction, the department's antitrust division sought structural changes to the deal, in the form of asset sales, instead of promises from the companies on how they would run their businesses postmerger. 

AT&T didn't agree. Bayer did. 

Germany's Bayer, a pharmaceutical and chemical conglomerate, is a leading player in the pesticide industry, while Monsanto, based in St. Louis, is a market leader on seeds and crop genes. The deal, which was announced in September 2016, would make Bayer the world's biggest supplier of pesticides and seeds for farmers. 

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