Business & Tech
    Next Score View the next score

    Bayer, Monsanto said to move closer to merger deal

    NEW YORK — Negotiations between Bayer AG and Monsanto Co. are advancing toward a merger deal after the companies made progress on issues including the purchase price and termination fee, people familiar with the matter said.

    Bayer chief executive officer Werner Baumann and his US counterpart, Hugh Grant, have had a series of constructive meetings in recent weeks, said the people, who asked not to be identified because the discussions are private.

    The companies, in talks to create the world’s largest producer of seeds and pesticides, could reach an agreement in the next two weeks, said the people, who cautioned that negotiations could still fall apart or be delayed.

    Advertisement

    Bayer, based in Leverkusen, Germany, has been examining Monsanto’s financial accounts as it weighs a new offer, people familiar with the matter have said.

    Get Talking Points in your inbox:
    An afternoon recap of the day’s most important business news, delivered weekdays.
    Thank you for signing up! Sign up for more newsletters here

    Monsanto in July rejected Bayer’s improved $55 billion bid, describing the $125-a-share proposal as “financially inadequate.” Bayer made its initial offer in May.

    Representatives for Bayer and St. Louis-based Monsanto declined to comment.

    Shares of Monsanto closed at $107.10, up 2.49 percent, giving it a market value of about $47 billion. Bayer gained 0.81 percent to 96.67 euros in Frankfurt, valuing the company at about $91 billion.

    The global agricultural industry is being reshaped as farmers, hurt by lower commodity prices, spend less, pushing seed and chemical makers to consolidate.

    Advertisement

    Dow Chemical Co. and DuPont Co. announced a plan in December to merge and then break into three entities, including a Monsanto-sized agriculture company.

    China National Chemical Corp. on Monday received approval from US security officials for its takeover of Swiss agrochemical and seeds company Syngenta AG, seen as the biggest regulatory hurdle that the $43 billion acquisition faces.

    Approval for ChemChina’s purchase of Syngenta from the Committee on Foreign Investment in the US has given fresh impetus to Bayer’s pursuit of Monsanto.

    Given that all three agricultural deals will need antitrust approval, there’s an incentive not to be the last one seeking clearance as the market will already have been consolidated by the other deals.