German drug and chemicals giant Bayer has made an unsolicited takeover offer for Monsanto, the world's biggest seed company, as high inventories and low commodity prices spur consolidation in the global agrichemicals industry. Hayley Platt reports.
It invented aspirin. Now German drugs firm Bayer has its eye on the world's biggest supplier of seeds and pesticides. It's made an unsolicited takeover bid for the U.S. giant Monsanto. If the deal goes ahead it could top $43 billion. But it's a big IF. (SOUNDBITE) (English) CCLA, CHIEF INVESTMENT OFFICER, JAMES BEVAN, SAYING: "I would expect Monsanto to repell the approach from Bayer and I would equally expect European regulators and people to generally be unimpressed by Bayer's appetite to take on one of the great players of genetically modified grains." A takeover would be the latest in a string of mega deals in the chemicals sector. In February ChemChina agreed to buy Swiss agrichemicals firm Syngenta for $43 billion. A company Monsanto wanted for itself. (SOUNDBITE) (English) CCLA, CHIEF INVESTMENT OFFICER, JAMES BEVAN, SAYING: "I think there will be a significant ongoing process of consolidation where the agrichemical businesses of the world join forces to create drop dead gorgeous customer propositions and this a piece of the jigsaw that remains outstanding." Most of the major agrochemical firms are looking to produce more robust genetically-engineered plants. They plan to sell them to farmers struggling with low commodity prices. But the competition to join forces is fierce. And expensive. One analyst has suggested Bayer might need a 27-billion-euro share issue to help pay for it.