Business Case Study: Bayer And Monsanto
SYMBIOSIS INSTITUTE OF BUSINESS MANAGEMENT
Bayer & Monsanto- Will they or won’t they?
As the Agricultural chemical producers aim to progressively expand their product offerings, one thing absent is the strong proof that a one-stop shop effectively sells on the farm. Bayer's offer for Monsanto follows the ‘seeds & sprays’ industrial reasoning behind the on-going Dow-DuPont merger and Monsanto's unsuccessful bid for Syngenta.
Varsha S, PRN: 15020841119
1/30/2017
Business Description- Seeds and sprays
Agro-chemicals and Crop Biotechnology consultancy Phillips McDougall reports that seeds worth $37.2Bn were sold in 2015 of which $19.8Bn (~53%) were genetically modified. The total market had fallen down by 8% in comparison to the …show more content…
Bayer’s share prices took a huge fall after the proposal of the deal due to the controversies haunting Monsanto as well as the status of other pending deals. The wide market belief was that the deal will not finalise and after Donald Trump gave his head nod for the Dow-Dupont deal the market is more affirmative about the merger and has seen rising prices of Bayer shares.
Financial Advisors
Credit Suisse, Morgan Stanley, Ducera Partners, Bank of America Merrill Lynch, and Rothschild are the advisors in the deal, which would be the largest takeover by a German company on record. Morgan Stanley and the boutique bank Ducera are advising Monsanto, and are expected to split $100-$110 million in advisory fees.
Credit Suisse, Bank of America, and Rothschild are advising Bayer, and will divide between themselves $70-80 million in advisory fees. Financing fees are expected to make up 0.3-0.5% of the debt capital raised, according to Freeman Consultants. Predicting that 75% of the $62 Bn offer is financed with debt capital, the fees is expected to be around 200Mn
Bayer & Monsanto- Will they or won’t they?
As the Agricultural chemical producers aim to progressively expand their product offerings, one thing absent is the strong proof that a one-stop shop effectively sells on the farm. Bayer's offer for Monsanto follows the ‘seeds & sprays’ industrial reasoning behind the on-going Dow-DuPont merger and Monsanto's unsuccessful bid for Syngenta.
Varsha S, PRN: 15020841119
1/30/2017
Business Description- Seeds and sprays
Agro-chemicals and Crop Biotechnology consultancy Phillips McDougall reports that seeds worth $37.2Bn were sold in 2015 of which $19.8Bn (~53%) were genetically modified. The total market had fallen down by 8% in comparison to the …show more content…
Bayer’s share prices took a huge fall after the proposal of the deal due to the controversies haunting Monsanto as well as the status of other pending deals. The wide market belief was that the deal will not finalise and after Donald Trump gave his head nod for the Dow-Dupont deal the market is more affirmative about the merger and has seen rising prices of Bayer shares.
Financial Advisors
Credit Suisse, Morgan Stanley, Ducera Partners, Bank of America Merrill Lynch, and Rothschild are the advisors in the deal, which would be the largest takeover by a German company on record. Morgan Stanley and the boutique bank Ducera are advising Monsanto, and are expected to split $100-$110 million in advisory fees.
Credit Suisse, Bank of America, and Rothschild are advising Bayer, and will divide between themselves $70-80 million in advisory fees. Financing fees are expected to make up 0.3-0.5% of the debt capital raised, according to Freeman Consultants. Predicting that 75% of the $62 Bn offer is financed with debt capital, the fees is expected to be around 200Mn