On Wednesday, Monsanto Chief Technology Officer Robb Fraley stood before about 200 soybean farmers, a Bayer executive by his side, and asked for their support of the two companies’ proposed merger.
He and Bayer AG board member Liam Condon discussed Bayer’s $66 billion offer for Monsanto with farmers from the United Soybean Board (USB) and the American Soybean Association (ASA) at USB’s winter meeting in St. Louis.
“I’m here to ask for your support,” Fraley told the friendly crowd, after describing why he thinks farmers should support the merger.
The move would create the world’s biggest seller of seed and crop-protection products. The combined company would own nearly 37% of the market for corn seed and nearly 30% of the market for soybean seed, according to Farm Journal research. It would also own 70% of the cottonseed market, according to USDA figures. The companies estimate combined sales will reach 23.1 billion euro ($25.92 billion), based on 2015 sales.
Still in the hands of regulators, the deal will likely close by the fourth quarter of 2017.
“Until then,” Condon told farmers, “we will remain totally separate companies.”
Other comments Fraley and Condon made about the proposed deal Wednesday:
- Condon reinforced the message the companies have given to regulators: They are willing to sell off areas where they overlap if objections are made on anti-trust grounds. Condon named cotton and “probably canola” as two of those areas.
- Fraley recalled how, only two years ago, Monsanto considered buying Syngenta, another crop-protection leader. Although the deal ultimately was unsuccessful, Fraley said he remains convinced that combining Monsanto’s seed strength with a strong chemical portfolio such as Bayer’s is the way to “create the innovative solutions” farmers need on their operations.
- “The way the game has traditionally worked,” Fraley told the farmers, “is it takes eight to 10 years” to develop new chemistry, “then another eight to 10 for the trait” it is paired with. Combining two companies with strengths in both seeds and chemistry will enable the merged organization to bring “innovative solutions” to farmers “better and faster,” Fraley said.
- Fraley also commented on President-elect Donald Trump’s nomination of Iowa Gov. Terry Branstad as ambassador to China. Monsanto still awaits Chinese regulatory approval for its Vistive Gold high-oleic soybeans. He said Branstad’s past work on behalf of biotech acceptance and advocacy for U.S. agriculture makes him an excellent choice for the role.
- Fraley also said he expects the proposed purchase of Syngenta by ChemChina will have the effect of convincing the Chinese to make their own regulatory process more efficient. “I’d like to believe the Chinese’s acquisition of Syngenta … and their clear recognition of [the importance] of a level playing field” will prompt them to such changes, he told the farmers.