The Bayer/Monsanto merger: a roundup

A successful merger would forge an agricultural powerhouse on an unprecedented scale. According to data from ETC Group, an ag industry watchdog, the resulting company would sell 29 percent of the world’s seeds and 24 percent of its pesticides.

But the deal is far from a sure thing. As Tom Philpott points out in Mother Jones, the Department of Justice (DOJ)—which would ultimately be responsible for green-lighting the deal in the United States—has previously been willing to block ag mergers of this scale. Two weeks ago, DOJ filed an antitrust lawsuit to block farm machinery producer John Deere’s $190 million bid for Monsanto’s Precision Planting unit (which manufactures the components of planters that steer using GPS technology).

When Monsanto mounted last year’s hostile, $45 billion takeover bid for Syngenta, the world’s largest producer of pesticides, regulatory concessions were one bone of contention. Meanwhile, in the EU, the proposed merger between leading chemical companies Dow and Dupont has been suspended by regulators due to disclosure failures; that effort was already viewed by some as an uphill battle.

What’s in it for Monsanto and Bayer? It’s an opportunity for further consolidation in what is already a highly-concentrated industry, and the resulting company would have formidable market leverage and lobbying muscle. This, according to former Federal Trade Commission chair David Balto, is  “the year of merging dangerously,” a trend of Hail Mary merger attempts by global agribusinesses, as farm profits fall, making farmers less willing to pay high input prices; Bayer would achieve new efficiencies in R & D and eliminate $1.2 billion in “redundancies.”

Monsanto, perhaps, is in a more precarious position without the merger. The patent on the company’s flagship product—glyphosate, sold as the pesticide application RoundUp—expired in 2000, and sales have dropped since then. Meanwhile, its “RoundUp Ready” GMO soybeans went off-patent last year, and generic alternatives have made their way to market. Though the company has managed to hold steady with a new, patent-protected “RoundUp Ready” soybean, it’s clear Monsanto needs to diversify: its glyphosate business is no longer the only game in town. Bayer’s chemical clout, combined with Monsanto’s seed expertise, could lead to a new generation of modified seeds—and, of course, a host of new pesticides they’re designed to resist.

Oh, and one last thing, if you haven’t noticed: Monsanto has a little bit of a PR problem. Like it or not, there’s no question the company is viewed by many as the embodiment of corporate evil. The lone (as of this writing) commenter on a related Wall Street Journal article wrote that he hoped Bayer understood it was buying a “planet raper.” If the acquisition goes through, it may be Monsanto’s best, least awkward chance to shed its biggest liability—its name.

So how did people taking the news on social media? Here’s how the story unfolded on Twitter. (Or take a look on our Storify here.)