Bayer, Monsanto's $66 Billion Marriage Could Cost 6,666 U.S. Jobs

September 19, 2016
By Alex Keown, BioSpace.com Breaking News Staff

LEVERKUSEN, Germany – How many jobs will Bayer ’s acquisition of Monsanto cost? While nothing is known for sure, a Breitbart article projects the number of estimated terminations at 10,000 due to overlaps in job duties. Although no sources were cited, the article speculates that the bulk of the cuts will come from Monsanto and amount to about 6,666.

Last week, Bayer finally landed Monsanto after it sweetened its original offer to $66 billion to bring the agricultural giant under the aspirin-maker’s umbrella. Bayer said that deal will be financed through a combination of debt and equity. Bayer said it has about 19 billion in equity, with the remaining $57 billion in financing. The final price is 44 percent higher than its initial offering, which was delivered back in May. In July, Bayer upped its offering to $54.7 billion to acquire Monsanto, which is the largest seed maker in the world.

It’s likely the merger, should it go through, will result in some layoffs, but neither company has announced anything as of yet. At the beginning of the year Monsanto announced the elimination of about 1,000 jobs as part of a cost-cutting plan as the company adjusts to falling sales of biotech-corn seeds and other concerns. The latest announced cuts bring Monsanto’s total job eliminations to 3,600 over the past two years. In October, the company said it would eliminate 2,600 employees across the board.

There are questions as to whether or not the merger will even go through due to serious concerns about the amount of agribusiness the new entity will control. The new entity will control about 58 percent of seed sales in the United States alone, according to the Denver Post, and about 25 percent globally. The new company will also control about 25 percent of the world’s pesticide sales, the Post reported, citing Vox. Looking at the Bayer Monsanto marriage in those terms shows how one company could control how the world feeds itself, the Post notes. That could be a big reason regulators in the United States and the European Union reject the proposed merger. Analysts at Bernstein Research told Reuters they believe there is a good chance the deal may not go through, with estimates of 30 to 50 percent that regulatory bodies will deny the acquisition. In addition to regulators, there could be a pushback against the deal from farmers, as well as some political activists who have protested Monsanto’s genetically modified seeds.

If a merger is rejected, Monsanto still gains, as it has a $2 billion antitrust protection. Although Bayer said it anticipates closing of the deal sometime next year. If the deal fails to go through, Bayer said it has committed $2 billion in a reverse antitrust break fee that will be paid to Monsanto.