The German drug and chemicals company is paying a hefty premium for the American seeds maker. As Fred Katayama reports, the deal will likely face close regulatory scrutiny.
Third time's a charm. Monsanto finally agreed to Bayer's third increased bid of $66 billion. The CEOs of both companies making the year's biggest deal official Wednesday morning. The German drug and chemicals company is paying a hefty premium to take over the American seed manufacturer. The deal will create an agribusiness giant that will command more than a fourth of the world market for seeds and pesticides. Monsanto CEO Hugh Grant: SOUNDBITE: HUGH GRANT, CHAIRMAN AND CEO, MONSANTO (ENGLISH) SAYING: "Together with Bayer, we're going to be able to offer growers even better solutions faster. This combination will deliver just that - an innovation engine that pairs Bayer's crop protection portfolio with our world class seeds and trays." But that also means regulators will likely take a close look at it. CMC Markets analyst Michael Hewson: SOUNDBITE: MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, (ENGLISH) SAYING: "While the bid may well get approved by shareholders over the course of the next week or so, it still has to overcome regulatory scrutiny." Analysts at research firm Bernstein give the deal a 50-50 chance of getting clearance, citing "political pushbacks." Under the deal, Bayer will pay Monsanto a $2 billion break-up fee should it fail to get the blessing of regulators. To get their approval, antitrust experts think the companies may have to sell some assets like soybeans, cotton and canola seeds. Bayer's shares rising sharply higher on news of the deal. Monsanto's were up, too.