WARREN BUFFETT

U.S. Billionaire Bets on Bayer-Monsanto

Warren Buffett
Picture Source: AP Photo

Warren Buffett has been on a shopping spree since Donald Trump won the U.S. presidential election. The legendary investor recently revealed that he has bought $12 billion worth of stock as the so-called “Trump trade” has pushed markets to historic levels since November.

Mr. Buffett’s holding company, Berkshire Hathaway, has now revealed which companies it’s investing in, and a U.S. seedmaker that has agreed to a tie-up with a German chemicals giant is high on his shopping list.

Berkshire has bought 8 million shares of Monsanto for $800 million in a clear sign that Mr. Buffett is confident that the company’s mega merger with Bayer will go through.

Though Mr. Trump has slammed mega deals such as U.S. telecom giant AT&T’s planned acquisition of cable provider Time Warner, the president has also appointed several officials to his cabinet who are viewed as friendly to mergers.

The €66-billion deal, the largest in German corporate history, still has to be approved by regulatory agencies around the world, including in the United States.

Though Mr. Buffett is confident about the deal’s chances, analysts are less optimistic. A survey by financial service Bloomberg gives the merger only a 40-percent chance of succeeding.

Mr. Buffett and Berkshire haven’t commented on why they’re so confident in the Monsanto-Bayer deal. U.S. President Donald Trump, however, could have something to do with it.

Though Mr. Trump has slammed mega deals such as U.S. telecom giant AT&T’s planned acquisition of cable provider Time Warner, the president has also appointed several officials to his cabinet who are viewed as friendly to mergers.

Mr. Trump tapped Joshua Wright, a former member of the Federal Trade Commission, as an adviser on anti-trust policy. In a November New York Times editorial, Mr. Wright criticized what he called “anti-merger fervor.”

The U.S. president has also met with the heads of Bayer and Monsanto to discuss the deal. Mr. Trump’s spokesman, Sean Spicer, said Bayer and Monsanto agreed to add 3,000 new jobs in the United States during the meeting.

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