Latest Insights from Bayer Leaders

November 3, 2017 03:36 PM
Young corn

Farm Journal recently had the opportunity to spend time with top leaders at Crop Science, a division of Bayer, during the company’s Future of Farming Dialog conference in Dusseldorf, Germany. Here are key the takeaways:

1. If the current timeline holds, the deadline for Bayer to finalize the purchase of Monsanto is Jan. 22, 2018. Liam Condon, Bayer management board member and president of the Crop Science division, shared that farmer–customers can expect business as usual with both companies. On day one, he plans to announce the name of the new combo company and the new leadership structure as well as provide key strategy details. Changes in the field will take time, he said.
When asked if the Monsanto name will be dropped after the acquisition, Condon said no decision has been made. Even so, he shared, “I can confirm that we are very proud of the Bayer brand and what it stands for.”

2. Monsanto’s seeds and traits drove the core value behind Bayer’s $66 billion purchase price. “Climate Corporation is of interest, but it is impossible to put a value on it,” Condon explained. He is most excited about major technologies from the two companies coming together to speed innovation.

3. Bayer’s ag group invests $1 billion each year in research and development (R&D). “We’re in the golden age of science and technology and advancing at a tremendous pace,” said Adrian Percy, global head of R&D for the Crop Science division. Breakthroughs in five industries—military, energy, healthcare, IT and engineering—are driving the innovation.

4. The search for a new mode of action is mission critical for Percy and his global team of 4,700 employees. “We haven’t had a new mode of action in 25 years, but we’re investing to change that,” he said, noting it takes a decade for new chemistry to go from the lab to the field.

5. Bayer has 15 new products with active ingredients and traits/trait combinations in the global pipeline to be launched between now and 2020.

6. On the crop protection side, Bayer plans to introduce a new insecticide, Tetraniliprole, in 2019 for use in corn and rice. It provides control of all important caterpillars and select beetles and sucking insects. Also in the works is Poncho/Votivo 2.0, which uses a second complementary bacterium to increase the productivity of the soil around roots.  

7. Bayer leaders believe the biggest risk for the company’s success in the farm sector stems from society versus the competitive landscape. They point to non-acceptance of modern agriculture with consumers as the largest risk.

8. Bayer and Monsanto remain market competitors until the closing. In the interim, Condon and his team are already setting sustainability goals and plans that will help protect modern agriculture. Once the deal is complete, Condon said, “We will be an even bigger company with even more responsibility. That means that we have to reach out to consumers in addition to ag with our advocacy.”

Bayer and BASF Strike LibertyLink Deal

Calling it a milestone on the path to completing the acquisition of Monsanto, Bayer agreed to sell select Crop Science businesses to BASF for EUR 5.9 billion as an active step to address potential regulatory concerns. The all-cash purchase includes global glufosinate-ammonium and the related LibertyLink technology for herbicide tolerance, essentially all of Bayer’s field crop seeds businesses. The seeds businesses to be divested include soybeans, global cotton (excluding India and South Africa) and North American and European canola.

The deal includes all intellectual property and facilities plus BASF has agreed to maintain more than 1,800 employees (700 in the U.S.) who will be transferred with the deal for at least three years post-closing. Naturally, the agreement is subject to receipt of all required regulatory approvals and the closing of the Monsanto transaction.

“It’s interesting to see this sale on the table as it in essence will create a third ‘genetics and chemistry’ company,” says Bob Young, American Farm Bureau Federation chief economist. “While the scale will be at a different level than other companies, it adds a significant third company for our farmers to look to for new technologies and innovative production tools.”


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