Bayer Announces End To Monsanto Name After Merger

The mega merger between Bayer and Monsanto was approved last week by the U.S. Justice Department ending months of anti-trust scrutiny. Bayer will have to sell off an unprecedented $9 billion in industry assets in order to clear the regulatory hurdles and the deal is expected to close on Thursday.

The news on Monday was that Bayer will end the Monsanto name after the merger due to the negative public image it has with consumers. The news is not surprising given the backlash Monsanto has received for years from the American public and the farming industry.

The news that the merger was going to move forward is a surprise to many people, the companies are both huge and have very diverse product portfolios. However, those product portfolios are clustered in the same types of industries especially when comparing the agriculture products holdings of both companies.

Therefore, that necessitated the big sell-off of assets by Bayer to make this merger happen. The precedent for a merger this large to actually be approved will have a tremendous impact on future M&A activity.

The Bayer – Monsanto merger will clear the path for mega-mergers to take place in other industries in the future. This is a merger that makes Dow-DuPont look small and that is a frightening prospect.

In my view I think the “Big Pharma” industry and the major media companies are going to try to capitalize on this merger with attempting to push through M&A proposals of their own in similar scale. The biotech field could also use this merger as an example of precedent for their own consolidation activity.
Furthermore, this merger between two titans in the agricultural industry will have an impact on the Disney bidding war with Comcast over the remaining assets of 21st Century Fox. That is a big decision that federal regulators will eventually have to make which will have an impact on the consumer who spends time watching TV or movies.

The Bayer – Monsanto deal is far more significant because, even though the Monsanto name is being erased from history, the products they manufacture will remain. The brand names such as Roundup will remain active and the merger with Bayer will not change anything, it is business as usual. This is bad news for the consumers, the farmers, and just about everybody.

Monsanto has built a negative public perception and an even worse brand image on the unabashed manufacturing of pesticides, herbicides, weed killers, and GMO containing seeds for food crops. The company has continued to make products that have been linked to certain cancers, autoimmune diseases, asthma, autism, and a host of other maladies.

The perception of Bayer in the U.S. is one that largely is shaped by the eponymous brand name of aspirin that is very popular as well as Alka Seltzer and some other branded products in the drug store channel. Those brands enjoy a largely positive image in America, and in my conversations with many people about this topic another theme came to the surface.

That theme is that German companies have a perception of integrity and for producing goods of high quality. The people I spoke with had the impression that Bayer would “turn around” Monsanto and that European influence would be for them to start making organic, environmentally friendly, and non-GMO containing seeds.

Unfortunately, from all the public statements we have from Bayer in Germany that will not be the case in this merger. They plan on keeping the U.S. headquarters for the new conglomerate in St. Louis, and they plan to continue to make those same products that Monsanto is producing currently. This is not to imply either that Bayer lacks integrity or that European companies are losing that sense of common values because that would be an inaccurate generalization.

Bayer is a microcosm of society: it creates some things that make the world better and it creates some things that make the world worse. It is also a perception versus the reality, some people feel that GMOs are safe and that having a good-looking lawn is more important than not using chemicals on the grass.

That strategic direction may surprise some people, especially Americans, but it is to be expected. Bayer will inherit brands from Monsanto that make billions of dollars in revenue each year. The American consumer and the farmers lose out here because this merger creates less competition in the seed and other agricultural products areas. The American consumer loses because the GMO and genetically altered food fight just became more difficult to win.

In the end, Bayer might enjoy a positive public perception in America right now, but it remains to be seen how that might change in the months and years ahead. The name Monsanto might be retired from the ranks, and Twitter is going to take the place of Monsanto in the S&P 500 this week, but Bayer is now tied to the legacy that Monsanto has built, and it is a rather negative one at best.

Bayer has made statements that they plan to “engage the consumer in new ways” I have no idea what that means. I do know that it does not include the discontinuation of Roundup or any of the other harmful chemical products produced by Monsanto.

This merger will have a direct impact on the American food supply, on the prevalence of genetically engineered ingredients in food, and on the future of mega-mergers. The effects of this merger will be seismic and will be felt for a long time to come.

Follow Up: Honeybee Population Decreases In U.S.

In a follow up to a previous article, the news on Friday is not good regarding the honeybee population. In a report by USA Today about one third of the honeybee population in the United States died in the past year. This decline in the population levels can have far-reaching consequences for our domestic food supply.

The honeybee is responsible for an estimated one out of every three bites of food that the average American consumes each day. The combination of pesticides, environmental changes, and parasites have triggered a dramatic decrease in the population of this crucially important insect.

This survey does report that the winter seasonal losses were the lowest for American bees in a decade. The winter is a characteristically a period where honeybees will die in larger numbers due to the climate conditions. The experts analyzing this report stopped short of saying that the winter loss number was good news because the overall population numbers have declined so precipitously in recent years.

Some crops are almost completely dependent on the honeybee, and those shortages in supply levels are going to result in higher demand. This higher demand with smaller supply levels will result in higher prices that will passed along to the consumer. This includes items such as almonds, raspberries, and other fresh fruits or produce.

The rise in the growth of the organic and farm-to-table movements put a premium on beekeeping and balancing the protection of the bees from parasites against the utilization of harsh chemicals or pesticides. There are certain pesticides and herbicides that are widely used in agriculture that attack the central nervous system of bees causing them to die.

The greater emphasis should be placed on decreasing the chemicals and pesticides used in the production of certain crops. Some states have already initiated areas for honeybee preservation as well, so those areas have many restrictions as far as the use of pesticides and other airborne agents.

The honeybee is vitally important to our food supply and while the winter losses in 2016 were better than recent annual findings, the population is still depleted by one third. It is clear that steps need to be taken to preserve the honeybee colonies in the United States. It is unclear at this point what those steps will be moving forward.