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Bloomberg's Miner on Bayer's $62 Billion Monsanto Bid (Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York, Bloomberg eleven LEO to Washington,
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  Speaker 1: and we can got to dive into as well. This
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  Speaker 1: big buyer on Santo deal. Jason Miner is gonna be
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  Speaker 1: joining us from Bloomberg Intelligence. Let's get back to Bloomberg
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  Speaker 1: World headquarters in New York City. Katherine Cardy has a
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  Speaker 1: Bloomberg Business Flash. Thank you, Kathleen. Bloomberg. Taking brought you
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  Speaker 1: insides Steen dot com. That's I N S I T
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  Speaker 1: E dot com. Well stocks are fluctuating today as investors
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  Speaker 1: await further direction on the health of the economy and
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  Speaker 1: prospects for higher interest rates. Monsanto shares have been up
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  Speaker 1: as much as seven point seven percent. Monsanto has yet
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  Speaker 1: to respond to BYRUS sixty two billion dollar takeover offer.
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  Speaker 1: According to a senior US government official, Monsanto's chief executive
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  Speaker 1: is surprised by the deal. By I made the offer
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  Speaker 1: as it seeks to become the world's biggest seller of
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  Speaker 1: seats and farm chemicals, tapping into growing demand at a
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  Speaker 1: time when farmers must foose productivity to feed an estimated
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  Speaker 1: ten billion people globally by twenty fifteen. For Navoman, chairman
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  Speaker 1: and CEO of Buyer, spoke on Bloomberg TV, and he
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  Speaker 1: said that a takeover Monsanto will benefit shareholders of both
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  Speaker 1: companies in the first year off the closing. The transaction
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  Speaker 1: already vc double digits to share acretion and with it
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  Speaker 1: also the ability to pay a higher dividend to our shareholders.
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  Speaker 1: trading day down. Industrial laverage currently up forty seven points
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  Speaker 1: twelve fifty one sixty and the tenure Treasury is up
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  Speaker 1: and now let's get a recap. The Dow Industrial Average
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  Speaker 1: is up forty three points, trading at seventeen thousand, five
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  Speaker 1: Tim Fox with my co host at Kathleen Hayes, let's
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  Speaker 1: turn our attention now to a big potential acquisition in
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  Speaker 1: the chemicals industry. Jason Meiner is senior, a global chemicals
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  Speaker 1: analyst for Bloomberg Intelligence, and he's sorry here to tell
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  Speaker 1: us a little bit more about a sixty two billion
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  Speaker 1: dollar cash bid for mon Santo. Jason, great to have you,
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  Speaker 1: as always, Uh is Monsanto worth sixty two billion dollars?
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  Speaker 1: You know stand alone? The market has not said it is.
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  Speaker 1: But the whole thing here is the bundle. Right. We've
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  Speaker 1: spoken before about how this is sort of the incredible
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  Speaker 1: hulk of the ag chem space and that's taking greater shape.
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  Speaker 1: You know, if you if Montana makes a peanut butter
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  Speaker 1: and Bear makes the jelly, is the sandwich worth fifty two?
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  Speaker 1: It's um It's the kind of premium that you kind
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  Speaker 1: of typically see in this space. So maybe so, But
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  Speaker 1: the shares aren't up to the bid yet, So what
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  Speaker 1: does that tell you? So there's a lot of skepticism,
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  Speaker 1: and I think the main question floating around this morning
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  Speaker 1: has been about UM overlaps and regulatory concern. You know,
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  Speaker 1: this is a space where there are six um enormous
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  Speaker 1: companies globally UM three now four of which are involved
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  Speaker 1: in in deals or potential deals, um and so. On
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  Speaker 1: the one hand, there's a question of concentration. And on
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  Speaker 1: the other hand, these are pretty complimentary businesses individually. Well, Jason, uh,
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  Speaker 1: they are complementary. I like, I love metaphors and analogy,
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  Speaker 1: so I love the peanut butter and jelly. But you know,
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  Speaker 1: maybe the problem is that buyer thinks this is more
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  Speaker 1: like a very wonderful black forest ham and some wonderful
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  Speaker 1: German cheese, and the market saying no, it's more just
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  Speaker 1: like peanut butter and jelly. It's the sandwich just isn't
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  Speaker 1: gonna be worth that much. Right there, there's a little
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  Speaker 1: bit too to suggest that you know that this is
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  Speaker 1: a trend. This is now the third and a major
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  Speaker 1: step in a trend of bundling across this space. And
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  Speaker 1: now DuPont was the most recent to kind of push
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  Speaker 1: this forward, gonna put together a great seed business to
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  Speaker 1: DuPont and a great chemicals business to Dow and do
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  Speaker 1: a similar thing here, although this one would be much
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  Speaker 1: larger the bironment standard one. But it's not a proven model, right.
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  Speaker 1: This is something cin Genta actually kicked off back in twelve.
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  Speaker 1: They said, well, we'll integrate this stuff. Some of the competitors, though, say, um,
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  Speaker 1: and there's some reason to expect this is true. Of course,
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  Speaker 1: that when you walk onto a farm and say we're
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  Speaker 1: your single source for everything, you're met with a lot
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  Speaker 1: of skepticism. There aren't a whole lot of farmers around
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  Speaker 1: the world who want to go to one source. Farmers
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  Speaker 1: are very entrepreneurial. They like to play suppliers off one another,
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  Speaker 1: so it's not entirely a proven model. Maybe the black
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  Speaker 1: Forest ham is a a pipe tream. Maybe I'm mixing
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  Speaker 1: metaphors black Forest Hams and pipe treams. I like the mixture.
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  Speaker 1: They they're gonna somehow tease this all apart because we
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  Speaker 1: go through these cycles, right, Jason. I mean they put
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  Speaker 1: it all together with the help of bankers, and the
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  Speaker 1: deal gets done, and then they find out later that
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  Speaker 1: they end up with a big ride off from Goodwill
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  Speaker 1: and that the deal really the culture to mash something
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  Speaker 1: didn't happen. And the idea that these things are you know,
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  Speaker 1: I've done and dusted. It's like the hard work is
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  Speaker 1: nowhere near beginning. Yeah, there's a there's a bigger dissimilarity here.
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  Speaker 1: And I've spent a little time today talking to some
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  Speaker 1: of our analysts and healthcare on the chemicals guy. But
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  Speaker 1: what they tell me is, you know, unless you're going
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  Speaker 1: to resuscitate the bugs after you kill them, the healthcare
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  Speaker 1: business and the herbicides business aren't an obvious fit. Um.
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  Speaker 1: And so another set of questions today is around whether
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  Speaker 1: Bear shareholders really want to own both. Management has made
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  Speaker 1: the point there's some similarities and how you approach regulators
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  Speaker 1: in R and D, but those two pieces are a
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  Speaker 1: very dissimilar portfolio at the higher levels. Certainly. Well, I'm
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  Speaker 1: so glad you said that, Jason, because I've been feeling
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  Speaker 1: kind of like that. I guess it's the obvious question
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  Speaker 1: I did. I didn't ask. I just thought, like, as
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  Speaker 1: everybody thinks, this is a good idea. But that's exactly
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  Speaker 1: what it struck me, because they are very different. But
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  Speaker 1: one of the one of my favorite stories on on
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  Speaker 1: the Bloomberg today. Uh, but Monsanto name hated by anti
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  Speaker 1: GMO force, is may vanish in a buyer deal. Uh.
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  Speaker 1: In Europe, of course, the anti GMO movement has been very,
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  Speaker 1: very strong, maybe picking up some steam in the US.
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  Speaker 1: We're a farmers stand on that I find very interesting
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  Speaker 1: what you said about them maybe not wanting to only
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  Speaker 1: go to one supplier, they want to have different suppliers.
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  Speaker 1: How much difference does this make this whole GMO controversy. Well,
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  Speaker 1: you know, farmers are very in favor of the technology.
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  Speaker 1: It's certainly they've adopted it of their own choice. It's
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  Speaker 1: something that has brought them greater profitability in all its
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  Speaker 1: shapes and forms in various places. Um. But there is
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  Speaker 1: a negative in the mont Santo Um, you know, moving
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  Speaker 1: out of St. Louis. If your target markets in the
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  Speaker 1: corn belt, Um, you know, I suppose a lot of
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  Speaker 1: the names farmers recognized will be preserved. But I do
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  Speaker 1: think that the name change, um, you know, well in
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  Speaker 1: the supermarket and among the GMO folks, that maybe it's
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  Speaker 1: a positive if it's a dastardly name it is. Um,
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  Speaker 1: there's a bit of a bit of challenge um selling
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  Speaker 1: this move in the corn belt for sure. Well, having
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  Speaker 1: trouble selling at the Bear investors. Bear shares a Bear
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  Speaker 1: are down a little bit, almost six percent down five
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  Speaker 1: and three quarters up. Mont Santos, yes, they're up significantly
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  Speaker 1: on on this. Mont Santo shares are up a four
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  Speaker 1: and a half percent, you know, so it doesn't look
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  Speaker 1: as other bear investors believe that seeds and pesticides go together.
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  Speaker 1: With Asper, Jason, what's the next thing we're looking for
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  Speaker 1: in this deal? What's the next step that has to
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  Speaker 1: be taken that we're going to market's gonna be responding
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  Speaker 1: to Yeah, I think that, Um, we'll be waiting for
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  Speaker 1: another bit. You know, in this situation, you'd imagine Montsanta
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  Speaker 1: would would like to be seen to hold out and
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  Speaker 1: at least push a bit higher. Um. But they made
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  Speaker 1: the case on their own that these things went together
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  Speaker 1: when they were a person agenda. So it's tough to
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  Speaker 1: few where it goes. But next, Jason Miner, thank you
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  Speaker 1: so very much. Terrific conversation looking at buyer's bid sixty
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  Speaker 1: two billion dollars to buy mont Santo. Entrepreneurial farmers may
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  Speaker 1: not be on board. Investors wondering about it too. Kathene Hayes,
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