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Why Bayer Is Keeping Its Name in the Bayer-Monsanto Deal
Here’s some more information on today’s announcement that the Bayer-Monsanto deal will close this Thursday, June 7. Liam Condon, CEO of Bayer CropScience, addressed media questions this morning during a teleconference.
- Bayer becomes the owner and sole stockholder of Monsanto on June 7. But it only can start integration once divestments are made that were mandated last week by the U.S. Department of Justice. “We expect that to happen in the next two months,” says Liam Condon, CEO of Bayer Crop Science. Until then, though, Condon adds that Monsanto will technically still be a competitor and run as a separate company. After the two-month period, Monsanto will no longer be a company name.
- The decision to maintain the company name is because “Bayer is a global icon for trust and quality,” says Condon. “It is clear Monsanto employees are incredibly proud of the great work they’ve done. However, their pride is firmly ingrained with great products and brands like DeKalb created over many years, and about customer relationships, and less about the Monsanto brand, per say. Several years ago, Monsanto considered changing the name Monsanto, but did not do it due to cost reasons. We think it is timely to use the opportunity now and have one common company name, and it is Bayer. We will retain all the strong brands in the Monsanto portfolio and the Bayer portfolio.”
- If you’re a real estate agent in St. Louis, get set. Bayer Crop Science is moving its North American headquarters and accompanying employees from its current location in Research Triangle Park, North Carolina, to Monsanto facilities in St. Louis.
- This summer, expect little difference in dealing with Monsanto and Bayer. “There will be a huge emphasis on continuity with customers and no surprises,” says Condon.
Long-term, Condon says the deal works only if it works for farmers. “It has to be good for farmers’ profitability, (for them) to be more productive, and to do it in a way to better manage inputs,” he says.
The National Farmers Union and Organization for Competitive Markets have raised concerns about the impact on the price farmers pay for inputs and also concerns about a handful of companies controlling the seed/trait/pesticide space.
Condon, though, says the DOJ thoroughly scrutinized the deal for areas where there might be lack of competition and for unfair pricing potential.
“It is our view that the DOJ spent a tremendous amount of time and tremendous amount of detail to figure out this solution,” he says. He says established chemical companies like FMC have bulked their product lineup. Meanwhile, numerous technology companies are entering the space. Factors like these will help ensure fair competition and transparency in pricing, he says.