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Potash-Agrium Deal Will be Subject to Growing Regulatory Scrutiny

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Image Source: Bruce Guenter By Kris Rosemann Suppressed crop prices and a supply glut have negatively impacted the financial performance of crop nutrient companies around the world and have helped spur a string of attempted mergers in the agriculture space. Seed giant Bayer’s (BAYRY) pursuit of rival Monsanto (MON) and ChemChina’s purchase of Syngenta (SYT) for $43 billion are two recent examples of consolidation attempts among major agricultural firms, the latter of which is expected to create the world’s largest supplier of pesticides and agrochemicals. Canadian firms Potash Corp (POT) and Agrium (AGU) had previously announced they were in preliminary merger talks and have now announced an agreement to combine forces in a merger of equals that will create a … Read more

Still More Ag Deals Being Cultivated?

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Image Source: Aqua Mechanical After Monsanto (MON) COO Brett Begemann called any takeover talks “wild speculation” just a week ago, German health care and agricultural product firm Bayer (BAYRY) on May 23 officially confirmed that it has offered to acquire US seeds company Monsanto for $62 billion in cash, or $122 per share. Monsanto’s shares continue to trade at a discount to the disclosed price in light of the uncertain path to deal completion. The proposed offer represents a substantial premium to Monsanto’s May 9 closing price of ~$89 and our standalone fair value estimate in the low $90s. At a deal multiple of nearly 16 times Monsanto’s trailing EBITDA and one far above our fair value estimate, Monsanto shareholders … Read more

Corporate Shopping This Holiday Season

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2015 may very well end up being remembered as the “year of the merger,” as the total dollar value of mergers and acquisitions in the year is on pace to set an all-time record. According to recent reports, Dow Chemical (DOW), DuPont (DD), and Yahoo! (YHOO), are doing what they can to be a part of that record. All three have faced tremendous pressure from activist investors as of late. On December 8, Dow Chemical and DuPont were reported to be in advanced talks on a massive merger. The rival chemical producers would likely split into three separate companies following the transaction; the three independently operating businesses would be material sciences, specialty products, and agrochemicals. Though labeled a “merger of … Read more