Monsanto, Bayer potential merger

ST. LOUIS, MO (KPLR)- Another of St. Louis’ Fortune 500 companies is on the verge of being sold to a foreign company. Bayer AG of Germany is once again negotiating to buy Monsanto and many economists say a deal is likely in the coming weeks. Bayer, which is primarily a chemical company, is trying to merge with Monsanto, a seed company, to form a more diversified company. Bayer had reportedly offered $55-billion for Monsanto several weeks ago, but that offer was shot down because it was thought to be inadequate. Now, both sides are once again working on a deal.

Unlike the AB/InBev merger, there are some significant difference when it comes to the impact on St. Louis. Howard Wall, a professor of economics at Lindenwood University in St. Charles says this potential merger is likely to be much better for the region than previous takeovers. “The reason that Bayer and Monsanto are even interested in getting together is because they do related, but different things,” he says. “So they are complimentary.” He says the two companies working as a merged company could be more successful than two entities working on their own. “The big difference is with Anheuser Busch, it was a beer company buying a beer company.” In this case, is a massive chemical company buying a seed company. So the St. Louis region might actually see an increase in jobs because Bayer would be buying to bulk up that division of the newly combined company.

As far as jobs go, it’s likely upper level management like administration, sales and marketing, and others might be eliminated. But other jobs might see grown. “Even if you start losing some of the high level jobs,” Wall says, “the bulk (of jobs are) still at the lower level and that’s where the action should be.

One concern would be charitable giving. The foundation arm of Monsanto has routinely given millions of dollars to charities across the St. Louis area. The other concern would be a hit to civic pride. St. Louis would lose the headquarters of another Fortune 500 company, which would reduce our region to 8 companies, down from 12 back in 2000. According to Wall, that really has no impact on the region other than bragging rights. “If the merger goes through, which it looks like it will, I don’t see it as being a terrible thing for the St. Louis area.”

Here are the Fortune 500 companies currently in Missouri. 9 of the 10 are in the St. Louis metro area:
https://www.missourieconomy.org/industry/fortune_500/index.stm

By John Brown