German chemicals and pharmaceuticals giant Bayer today sealed a USD 63-billion merger with US-based Monsanto, creating an agrichemical behemoth with lofty ambitions to feed the world but lambasted by environmentalists.
"We will be even better placed to help the world's farmers grow more healthy and affordable food in a sustainable manner," chief executive Werner Baumann said in a statement.
The German firm will pay owners of Monsanto stock USD 128 per share immediately.
But combining operations cannot begin until Bayer has ceded existing seeds and pesticides activities to rival BASF, concessions agreed in lengthy negotiations with competition authorities in Washington and Brussels.
Executives are betting big on projections that around 10 billion people will live on Earth by 2050, meaning more food must grow on the same amount of arable land.
They say that can best be achieved with technologies rejected by green organisations and politicians, including genetically-modified (GM) seeds designed to resist strong pesticides.
Modified crops and digital tools to help farmers adapt to the weather and monitor the health of their fields could also help swell harvests threatened by climate change.
While CEO Baumann promised the Bayer-Monsanto marriage would "create significant value" for shareholders, he added that "our sustainability targets are as important to us as our financial targets."
German business daily Handelsblatt asked today "whether Bayer is strong enough to do the splits." "On the one side is the business necessity to make as much money as possible with plant protection chemicals and seeds as investors demand. On the other, Bayer must earn trust among a public that's increasingly sceptical about industrial agriculture."
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