MONSANTO DEAL

Monsanto Shareholders Challenge Bayer Deal in Court

John McNierney, Philip Finale
Monsanto has benefited from the Bayer deal, but not all shareholders are happy. Source: picture alliance / AP Photo

It was only a matter time before Bayer’s blockbuster acquisition of the world’s largest seeds and pesticides maker, Monsanto, would face a lawsuit.

The legal challenge, however, doesn’t come from environmentalists, as one might expect, who have long been hostile to Monsanto’s business practices.

Instead, Monsanto’s own shareholders are challenging the sale price as inadequate and have accused Monsanto’s executives of enriching themselves at the expense of Monsanto’s investors.

The class-action lawsuit, filed in Monsanto’s hometown of St. Louis, accuses the executive board of withholding information about the transaction.

In addition to Monsanto, the lawsuit also targets Bayer as well as Monsanto’s investment banks, Morgan Stanley and Ducera Partners. Monsanto has issued a statement dismissing the accusations as unfounded.

The blockbuster merger between the two chemicals gians was announced in September. The shareholders’ legal challenge likely stems from disappointment that Bayer reached a deal to buy the seeds maker for a smaller sum of $128 (€120) per share, or $66 billion total.

During the negotiations, Wall Street analysts had originally kicked around a higher price tag of between $130 and $135 as reasonable for Monsanto.

The companies are not expecting the challenge to succeed. According to Handelsblatt’s industry sources, the lawsuit is being viewed as “typical and in accordance with standard business practices” in the United States.

 

Bert-Friedrich Fröndhoff leads a team of reporters which covers the chemicals, healthcare and services industries at Handelsblatt. To contact the author: froendhoff@handelsblatt.com

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