Bayer said positive synergy effects from the planned takeover of U.S. seeds maker Monsanto would be about $300 million below its previous target because it will sell more businesses than initially expected to get antitrust approval.
Bayer Chief Executive Werner Baumann again threw his weight behind the deal, despite higher antitrust hurdles and delays in the regulatory reviews, speaking to shareholders at the annual general meeting on Friday.
“I’m convinced that this acquisition has very great potential for creating value for our company, our stockholders and our customers,” Baumann said, adding he expected the deal to be approved and closed in the near future.
If the deal is not closed by June 14, Monsanto could withdraw from the takeover agreement and seek a higher price.
The last major hurdle to clear is the go-ahead from U.S. regulators for the deal, worth $62.5 billion including debt, but Bayer has already come to an agreement in principle on the terms of approval with the Department of Justice.
It has agreed to sell assets, which include seed, crop chemicals and digital farming activities, with revenues of 2.2 billion euro ($2.6 billion) for 7.6 billion euros to rival BASF.
Combining with takeover target Monsanto will have synergy effects of about $1.2 billion on adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from 2022, Bayer said – less than the $1.5 billion targeted when the transaction was agreed in September 2016.
By Patricia Weiss
During a European Industry Summit held on the site of BASF in Antwerp, leaders from basic industry sectors, representing 7.8 million workers in Europe, joined forces with European trade unions and European leaders to address pressing concerns regarding Europe’s industrial landscape.
The use of blue or low-carbon hydrogen, made from natural gas with carbon capture and storage (CCS), could increase near-term global warming by 50% compared with burning fossil fuels directly for energy if emissions are not properly managed, according to a new study by NGO the US Environmental Defense Fund (EDF) and the University of Arizona.
In a move to improve the supply of renewable hydrogen and thus reduce dependence on natural gas and contribute to achieving the objectives of the European Green Deal and the REPowerEU plan, the EU Commission has approved a third Important project of common European interest (IPCEI) to support hydrogen infrastructure.