Agrochem Giants

Betting on the Bayer-Monsanto Merger

  • Why it matters

    Why it matters

    Experts see good omens for the Bayer-Monsanto merger in the approach regulators are taking to other current big takeovers in the agrochemicals sector.

  • Facts

    Facts

    • Last summer, German agricultural and pharmaceuticals giant Bayer put in a bid of $66 billion for the American seed manufacturer Monsanto.
    • The deal must be approved by regulators in both the U.S. and Europe.
    • Last week, renowned American investor Warren Buffett spent almost $1 billion on Monsanto stock, which market watchers took as a strong vote of confidence in the merger.
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    Audio

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Bayer Confirms $66bn Monsanto Takeover
Agro-chem industry giants at work: There are several major mergers proposed in the sector this year. Source: Picture alliance/Zuma Press

Star investor Warren Buffett is famous for sniffing out a good deal. It has made him very rich. And just a few days ago, he surprised market observers by buying 8 million shares in the American seed manufacturer Monsanto.

That’s just a 1.8 percent stake. But the decision got attention. Mr. Buffett did not publicly explain his move. But it is clear he thinks Bayer’s $66 billion takeover attempt will gain approval from the U.S.’ Federal Trade Commission and the Department of Justice, the two authorities tasked with enforcing antitrust law in the United States.

If the deal goes through, Mr. Buffett stands to make a tidy profit: He paid around $830 million for the shares, which Bayer would buy from him for $1.02 billion.

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