• by Thom Forbes  @tforbes, September 15, 2016

Monsanto yesterday agreed to a $66 billion offer from Bayer in a takeover that the two companies hope will close by the end of 2017. It ended months of wooing but the prenuptial phase promises to be a rocky one, with intense pressure from politicians, farmers, anti-trust regulators and environmentalists who already are not holding their peace.

“It’s a troubling combination of toxins and more toxins,” Doug Gurian-Sherman, the director of sustainable agriculture and a senior scientist at the Center for Food Safety, tells Bryce Gray in the St. Louis Post-Dispatch. Both companies “have done things that, from our perspective, are not in the public’s interest,” he says.

“Bayer, the German firm better known for pharmaceuticals such as Aleve and Alka-Seltzer, said it will spearhead the largest all-cash buyout in history in hopes of taking over St. Louis-based Monsanto, the world’s largest supplier of genetically modified seeds,” writes Drew Harwell for the Washington Post.

“The merger marks one of the most prominent signs yet of the broadening acceptance of genetically modified foods, a bogeyman for environmental activists that has nevertheless redefined the capabilities for crops in the United States and worldwide,” Harwell continues.

The deal “could shrink competition and increase prices, but also raises the prospect of better seeds and chemical products that could bolster farmer’s profits,” writes Christopher Doering, for the Des Moines Register. “The merger, which has been in the works for months, is the latest in a wave of consolidation of crop, seed and fertilizer companies during the farm economy's prolonged downturn — a trend that has Iowa farmers and politicians on edge.”

Indeed, Monsanto and Bayer “have chosen to do a deal in the year of merging dangerously," says David Balto, a former policy director at the U.S. Federal Trade Commission, report Reuters’ Diane Bartz and Greg Roumeliotis  "They are in for a tough time." And Diana Moss, president of the American Antitrust Institute, says “this merger is not a slam dunk.”

It is the fourth major agribusiness merger announced in the last year — each of which “creates the possibility of higher costs for farmers,” report Leslie Picker, Danny Hakim And Michael J. de la Merced for the New York Times. 

The most recent was Monday, when Agrium of Calgary, Alberta, agreed to combine with the fertilizer producer Potash Corporation of Saskatchewan. Syngenta of Switzerland agreed in February to a takeover by the China National Chemical Corporation;  talks with regulators are ongoing. Meanwhile, Dow’s merger deal with DuPont is under Justice Department review.

Politicians across the spectrum had their own talking points and plans to very publicly investigate whether the deal is in the public’s interest. Vermont independent Sen. Bernie Sanders called the proposed merger “a threat to all Americans.” Iowa Republican Chuck Grassley, chairman Senate Judiciary Committee, scheduled a hearing for next Tuesday. 

“Senators Mike Lee (R-Utah) and Amy Klobuchar (D-Minn.), the two top antitrust lawmakers, also expressed concern,” Reuters’ Bartz and Roumeliotis write. 

Meanwhile, the Wall Street Journalreports that farmers themselves “are reconsidering the use of biotech seeds as it becomes hard to justify their high prices amid the measly returns of the current farm economy.” Although “genetically engineered seeds have become like mobile phones—multifunctional and ubiquitous” on farms over the past two decades, Jacob Bunge writes, “major crop prices have skidded lower for three years, and this year, many farmers stand to lose money.” 

On top of that, weeds have a knack for evolving and persisting, as any backyard gardener knows, which means that “older, tougher herbicides” than Monsanto’s Roundup — and even hoes — have been employed to kill them. Meanwhile, seed prices keep rising even as “crop yields, in many cases, stopped keeping up.”

“From business experts to activists, some are skeptical that the deal will move the needle of some public sentiment, which they say remains weighted against the Creve Coeur-based company branded as “Monsatan” in some activists’ circle,” Gray writes in the St. Louis Post Dispatch.

“When you look at the history of Bayer, it’s almost as bad as Monsanto, in terms of spending huge amounts of money to resist genetically modified food labeling,” Michael Hansen, a food safety and environmental health expert for Consumers Union, tells Gray. On the other hand, Wayne Keene, director of the Center for Sales and Customer Development at the University of Missouri-Columbia, says that a deal could afford Monsanto “the opportunity to reset the discussion,” as well as expand its marketing opportunities.

“If you look at humongous challenges that growers are confronted with of having to produce evermore on limited acreage in order to feed ever-growing population, our purpose is to bring better solutions faster to growers so they can increase yield and with that contribute feeding a rapidly growing population,” Bayer CEO Werner Baumann tells Fox Business Network’s “Countdown to the Closing Bell,” in a joint interview with Monsanto CEO Hugh Grant.

“Farmers are starving for innovations,” Grant tells host Liz Claman.