What Farmers Need To Know About The Bayer Monsanto Merger

The Bayer Monsanto merger is big news for the agricultural world. Here's what farmers need to know about the deal.

Bayer, the German chemical and pharmaceutical giant, is buying Monsanto, the American seed and pesticide company, for $66 billion. The deal, announced on Wednesday, is the latest in a wave of consolidation sweeping the agricultural industry.

The merger is likely to be scrutinized by antitrust regulators in the United States and Europe. But if it is approved, the combined company will be a behemoth in the business of supplying farmers with the seeds, chemicals and digital tools they need to grow their crops.

The deal is a bet by Bayer that it can wring more profit from Monsanto's dominance in genetically modified crops, which are engineered to withstand herbicides and pests. Bayer already is a major player in the crop-chemicals business, and the merger would give it greater control over the market for both seeds and chemicals.

The two companies have complementary businesses. Monsanto is the world's largest seed company, with a 27 percent share of the global market for commercial seeds, according to the research firm Euromonitor. It is also a leading producer of herbicides, with about a 20 percent share of the global market.

Bayer, meanwhile, is the world's second-largest maker of crop chemicals, with a 15 percent share of the market, according to Euromonitor. It is also a leading producer of pharmaceuticals and over-the-counter drugs.

The merger would give Bayer control of some of the world's best-known brands in agriculture, including Monsanto's Roundup herbicide, its Deltapine cotton seeds and its Dekalb corn seeds.

The two companies have been collaborating for years. In 2006, they formed a joint venture called Climate Corp, which sells digital tools to farmers to help them manage weather risks.

The deal comes as the agricultural industry is under pressure from falling crop prices and slowing demand. In the United States, farm incomes are expected to decline for the third consecutive year in 2016.

The consolidation in the industry is being driven by a desire to cut costs and to gain scale to invest in new technologies.

In the past two years, DuPont and Dow Chemical have merged their seed and pesticide businesses, and Syngenta, the Swiss chemical company, was bought by ChemChina, a state-owned Chinese company.

The Bayer-Monsanto deal is the latest in a wave of consolidation sweeping the agricultural industry.

The merger is likely to be scrutinized by antitrust regulators in the United States and Europe. But if it is approved, the combined company will be a behemoth in the business of supplying farmers with the seeds, chemicals and digital tools they need to grow their crops.

The deal is a bet by Bayer that it can wring more profit from Monsanto's dominance in genetically modified crops, which are engineered to withstand herbicides and pests. Bayer already is a major player in the crop-chemicals business, and the merger would give it greater control over the market for both seeds and chemicals.

The two companies have complementary businesses. Monsanto is the world's largest seed company, with a 27 percent share of the global market for commercial seeds, according to the research firm Euromonitor. It is also a leading producer of herbicides, with about a 20 percent share of the global market.

Bayer, meanwhile, is the world's second-largest maker of crop chemicals, with a 15 percent share of the market, according to Euromonitor. It is also a leading producer of pharmaceuticals and over-the-counter drugs.

The merger would give Bayer control of some of the world's best-known brands in agriculture, including Monsanto's Roundup herbicide, its Deltapine cotton seeds and its Dekalb corn seeds.

The two companies have been collaborating for years. In 2006, they formed a joint venture called Climate Corp, which sells digital tools to farmers to help them manage weather risks.

The deal comes as the agricultural industry is under pressure from falling crop prices and slowing demand. In the United States, farm incomes are expected to decline for the third consecutive year in 2016.

The consolidation in the industry is being driven by a desire to cut costs and to gain scale to invest in new technologies.

In the past two years, DuPont and Dow Chemical have merged their seed and pesticide businesses, and Syngenta, the Swiss chemical company, was bought by ChemChina, a state-owned Chinese company.