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Bayer Closed the Monsanto Deal, Now What? | KTIC Radio

Bayer Closed the Monsanto Deal, Now What?

ROCKVILLE, MD. (DTN) — Today, Bayer became the sole owner of Monsanto. Both companies will continue to operate as separate entities for another two months, while Bayer sheds the $9 billion in assets regulators required it divest.

Only then will the Monsanto name be retired, and the new Bayer emerge.

What will it look like?

Details are still scarce — even Bayer can’t be sure, as the German pharmaceutical company doesn’t have access to Monsanto’s “confidential information” for two months yet, noted Liam Condon, president of Bayer’s Crop Science Division.

WHAT BAYER WON’T LOOK LIKE

First, let’s brush up on everything Bayer will NOT be bringing to the marriage. It’s a lot — the company was required to divest most of its trait and seed portfolios, which means Bayer’s new Crop Science Division will contain mostly Monsanto products.

Bayer will sell all of the following, mostly to BASF:

— Liberty Link crops — except rice — and most of the corresponding glufosinate ammonium chemical patents

— Bayer’s soybean, cotton, canola and wheat seed businesses, along with its vegetable seed business, Nunhems

— Bayer’s seed treatment businesses Poncho (clothianidin) and ILeVO (fluopyram)

— Balance GT Soybeans and their corresponding Balance herbicides (HPPD)

— Xarvio, Bayer’s digital farm management platform

— New research pipeline projects, namely Bayer’s hybrid wheat program and some herbicide projects involving ketoenole and N,O-Chelator (NOC) herbicides.

Monsanto will also give BASF access to elite soybean germplasm developed by Monsanto for 2019 and 2020. According to the agreement, BASF gets a permanent license to 20 varieties of its choosing — two from each Maturity Group 0 to 4.

THE STATE OF THE STAFF

Last month, Monsanto Chief Executive Hugh Grant announced he would step down after the deal closed. After a transition period, many of the other “chiefs” will go, too, including Chief Technology Officer Robb Fraley.

Liam Condon, a current Bayer executive, will lead the company’s new Crop Science Division. See more details in this DTN story: https://www.dtnpf.com/….

But what about the employees farmers actually work with? Condon struck a reassuring note on this topic, noting that most of the overlap between the two companies was “infrastructure, not people.” Administrative overlap in areas like IT will require some “job changes,” as Condon put it, but overall Bayer expects to add to its employee headcount over time, he added.

Bayer will also keep the Monsanto brands farmers know — such as Asgrow, Channel and DeKalb, and their sales reps will stay the same for at least this season, Condon said.

“For the initial two-month period where we continue as standalone companies, basically nothing changes for Monsanto, for Monsanto customers and for Monsanto reps; for Bayer customers and Bayer reps, absolutely nothing changes,” he said. “After we’re allowed to integrate, initially I would also not expect any immediate short-term changes because again, we’re placing huge emphasis on continuity for our customers.”

In April, Bayer signed an agreement to send about 2,500 employees to BASF, as part of its sale of various seed, trait and chemical businesses to the German chemical company. In that agreement, BASF committed to maintaining all permanent positions for at least three years from the June closing date.

So farmers who use those products newly sold to BASF (such as Poncho and ILeVO), should see familiar faces running their accounts, albeit under a new owner.

Bayer will still be based in Germany, but the company has picked St. Louis, where Monsanto is headquartered, as the new home of its Crop Science Division. Since Bayer’s current Crop Science Division is located in Research Triangle Park, North Carolina, this will require employees there to migrate to the new St. Louis headquarters, Condon said during a press conference on Monday.

The new Bayer will boast 35 research and development sites, 175 breeding stations, and 8,000 research and development employees, Condon said.

WORKING ON IMAGE

Bayer is sticking with its own corporate name, following the results of company research, Condon said.

“We simply had a strong belief that the Bayer brand has a very strong, positive recognition simply based on brand audits that we’ve done worldwide, and this is something that we couldn’t say about the Monsanto corporate brand,” Condon said.

That led to Bayer’s decision to retire the Monsanto name, and it will require some serious public relations efforts, he said.

“For sure, just changing a brand name doesn’t change a reputation overnight,” he said. “Our success also depends on our ability to build trust, that is why we will aim to deepen our dialogue with society and the public, and we’re committed to listening to our critics and working together to find common ground. Because we firmly believe agriculture is just too important to allow ideological differences to bring progress to a standstill.”

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