Given the high acquisition premium with an all-cash transaction, antitrust concerns that could lead to subsequent divestments, and Monsanto’s negative brand image due to its frequent involvements in controversial business operations, did Bayer make the right decision to diversify into agrochemicals by merging with Monsanto?

Strategy and globalization : case bayer mosanto

Paper details:

1. Why did Bayer diversify into the highly competitive agrochemical industry when its pharmaceutical market was still growing?

2. Given the high acquisition premium with an all-cash transaction, antitrust concerns that could lead to subsequent divestments, and Monsanto’s negative brand image due to its frequent involvements in controversial business operations, did Bayer make the right decision to diversify into agrochemicals by merging with Monsanto?

3. Given the high risks associated with acquiring Monsanto (e.g., high premium antitrust, and brand image), why did Bayer still choose to pay the acquisition all by cash?

4. What might be the consequences of market concentration for the agrochemical industry following the merger? What are the regulatory challenges and ethical concerns associated with an oligarchic market?

5. What are your recommendations for Bayer to move forward if the merger deal is approved? How can the combined entity create sufficient synergies? If the deal is approvecgod, what should Monsanto do?