Bayer CEO has ‘no regrets’ for $63bn Monsanto purchase

Bloomberg

Bayer AG’s $63 billion Monsanto purchase has suffered regulatory delays, mounting legal claims and now will yield lower earnings for the year than earlier forecast. Still, the company’s CEO says he has “no regrets.”
The German company lost out on revenue from Monsanto’s busy spring season, when farmers in the Northern Hemisphere plant the bulk of their crops, because antitrust challenges slowed the acquisition of the maker of Roundup weed killer.
The shares fell as much as 3.7 percent in Frankfurt, and have lost about 23 percent this year.
“The Monsanto business is very healthy,” Chief Executive Officer Werner Baumann said Wednesday in an interview with Bloomberg TV.
“We are as excited as we have ever been about the combination, and there are absolutely no regrets.”
While acquiring Monsanto made Bayer the biggest seed and agricultural-chemicals maker in the world, the purchase has been dogged by a series of challenges from regulators and legal pitfalls. After officials around the world scrutinised the deal’s effect on competition in the consolidating agriculture industry, a legal battle over Roundup came to the fore.

Regulatory Scrutiny
Closing the deal required nearly two years of wrangling with regulators. Bayer filed some 40 million pages of paperwork, eventually agreeing to sell 7.6 billion euros ($8.8 billion) in agriculture assets — including its vegetable-seeds business — to German competitor BASF SE to placate antitrust authorities. The delays pushed the deal to June. Monsanto’s sales in the second quarter of 2017 were $5.07 billion, compared with $2.69 billion in the fourth quarter.
The deal continued to generate headaches when a California court last month awarded $289 million to a school groundskeeper who claimed that the herbicide had helped cause his cancer.
As of late August, some 8,700 people were seeking damages over glyphosate, the main ingredient in Roundup — a number that has risen steadily in recent months. More cases are expected, Bayer said.
Bayer contends that Roundup is safe. The company said it’s set aside money for a “vigorous” defense, without saying how much.