Bayer Faces Objections On Monsanto Deal

The impending deal between Monsanto and Bayer is at risk of getting objections from the European Union’s antitrust regulator.

The deal between the two companies which would allow Bayer to takeover Monsanto for a proposed amount of $66 billion is set to be blocked or received objections from the European Union due to the possibility of the merger hurting competition according to various sources familiar with the matter.

The Bayer-Monsanto deal which has been under negotiations and talks since last year eventually coming up with the mutual decision to sell Monsanto to Bayer for $128 per share or a total of $66 billion representing a growth of 44% over its stock price back in May 2016 during the early parts of the deal.

The proceedings of the deal provided Monsanto a positive growth outlook. During its fourth quarter earnings report last October, the company’s shares traded 1% higher after its earnings beat most earnings estimates.

During the quarter prior to that, Monsanto was also able to post fairly positive earnings numbers with the demand for crop yielding products growing and set to push more growth opportunities for the company.

However, the European Union has reportedly listed out its objections and adding a number of concerns that may result from Bayer’s complete takeover of Monsanto. Last week, officials from Monsanto and Bayer has reportedly met with the European Union and has been working on addressing the said issues according to some sources.

European Union Competition Commissioner Margrethe Vestager stated that the regulators are now looking on carefully considering the potential competition issues with both the companies involved making sure of affordable prices being offered affordably priced seeds and pesticides.

Shares of Monsanto slightly slipped by 0.6% during the closing session last week on early reports of the European Union’s objections.

The ongoing deal between the two companies would bring in around $1.5 billion every year after the deal concludes with shareholders from Bayer expected to benefit in earnings per share due to the merger.

According to Bayer spokesman Darren Wallis in an email, the company continues to work with the necessary regulatory parties which includes the European Union in ensuring the successful closing of the Monsanto acquisition by the first couple months of 2018. Back in October, the seed and herbicide unit of Bayer was decided to be sold by the company which includes its LibertyLink branded seeds and Liberty herbicide businesses wo crop chemicals maker BASF for an amount of 5.9 billion euros which is part of the company’s efforts in reducing concerns from competition.

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