Bloomberg's Miner on Bayer's $62 Billion Monsanto Bid (Audio)

and Y Melon Client Conference. We're gonna be speaking in this half hour with Samir Pandery from Assets Servicing at B and Y Melon on big data and the fintech challenge, and we can got to dive into as well. This big buyer on Santo deal. Jason Miner is gonna be joining us from Bloomberg Intelligence. Let's get back to Bloomberg World headquarters in New York City. Katherine Cardy has a Bloomberg Business Flash. Thank you, Kathleen. Bloomberg. Taking brought you

by Persons Inside twenty sixteen. The must attend the event for advisers less than two weeks away June seventh through the night. If you hadn't registered, you still can visit insides Steen dot com. That's I N S I T E dot com. Well stocks are fluctuating today as investors await further direction on the health of the economy and prospects for higher interest rates. Monsanto shares have been up

as much as seven point seven percent. Monsanto has yet to respond to BYRUS sixty two billion dollar takeover offer. According to a senior US government official, Monsanto's chief executive is surprised by the deal. By I made the offer as it seeks to become the world's biggest seller of seats and farm chemicals, tapping into growing demand at a time when farmers must foose productivity to feed an estimated

ten billion people globally by twenty fifteen. For Navoman, chairman and CEO of Buyer, spoke on Bloomberg TV, and he said that a takeover Monsanto will benefit shareholders of both companies in the first year off the closing. The transaction already vc double digits to share acretion and with it also the ability to pay a higher dividend to our shareholders. And we check the markets every fifteen minutes throughout the

trading day down. Industrial laverage currently up forty seven points at quarter percent, trading a seventeen thousand, five hundred forty seven SMP five foundered up two point to tenth of a percent, trading at two thousand fifty four nastacked up

fourteen points a third of a percentage. Trading at forty three West Texas Intermediate Crude Royal down thirty cents of barrel, a loss of two thirds of a percent, Trading at forty eleven spoke bolled down a dollar thirty announce at twelve fifty one sixty and the tenure Treasury is up one thirty second with the yield of one point eight three percent. And now we'll look at some of the other stories were following today. Thank you Catherine from the

Boomberg news room. I'm Bonnie Quinn, a Baltimore officer and has been acquitted of assault and other charges in connection with the death of Freddie Gray. Gray died after being injured while in police constanding. Officer Edward Nero was one of six Baltimore police officers charged in the case. President Obama says the US is lifting its ban on weapons sales to Vietnam The President made the announcement at a

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only just beginning. Democrat Adam Schiff and Republican Edward Royce, both of California, tells ABC's This Week they're not ruling out a change in the administrator's office. Amy Morris, Bloomberg Radio, Washington New Jersey Governor Chris Christie has rejected legislation that overhauls the powerful Port Authority of New York and New Jersey, and Christie conditionally vetoed the measure pass by the Democrat led legislature in April. Instead, he's recommending that lowmakers adopt

a bill similar to the one already enacted. In New York Global News twenty four hours a day, powered by our twenty four journalists more than one bureaus around the world from the Bloomberg Newsroom and Vanny Quinn Catherine, thank you, and now let's get a recap. The Dow Industrial Average is up forty three points, trading at seventeen thousand, five hundred forty three. Smp F I founded up a point in half at two thousand fifty three. Nastack higher by thirteen,

trading at two And that's a Bloomberg business flash. You're listening to Taking Stock with Kathleen Hayes and Pim Fox on Bloomberg Radio. They are broadcasting live from the p n Y Melan Assets Servicing Conference in Tucson, Arizona. And Tim Fox with my co host at Kathleen Hayes, let's turn our attention now to a big potential acquisition in

the chemicals industry. Jason Meiner is senior, a global chemicals analyst for Bloomberg Intelligence, and he's sorry here to tell us a little bit more about a sixty two billion dollar cash bid for mon Santo. Jason, great to have you, as always, Uh is Monsanto worth sixty two billion dollars? You know stand alone? The market has not said it is.

But the whole thing here is the bundle. Right. We've spoken before about how this is sort of the incredible hulk of the ag chem space and that's taking greater shape. You know, if you if Montana makes a peanut butter and Bear makes the jelly, is the sandwich worth fifty two? It's um It's the kind of premium that you kind of typically see in this space. So maybe so, But the shares aren't up to the bid yet, So what

does that tell you? So there's a lot of skepticism, and I think the main question floating around this morning has been about UM overlaps and regulatory concern. You know, this is a space where there are six um enormous companies globally UM three now four of which are involved in in deals or potential deals, um and so. On the one hand, there's a question of concentration. And on the other hand, these are pretty complimentary businesses individually. Well, Jason, uh,

they are complementary. I like, I love metaphors and analogy, so I love the peanut butter and jelly. But you know, maybe the problem is that buyer thinks this is more like a very wonderful black forest ham and some wonderful German cheese, and the market saying no, it's more just like peanut butter and jelly. It's the sandwich just isn't gonna be worth that much. Right there, there's a little bit too to suggest that you know that this is a trend. This is now the third and a major

step in a trend of bundling across this space. And now DuPont was the most recent to kind of push this forward, gonna put together a great seed business to DuPont and a great chemicals business to Dow and do a similar thing here, although this one would be much larger the bironment standard one. But it's not a proven model, right. This is something cin Genta actually kicked off back in twelve. They said, well, we'll integrate this stuff. Some of the competitors, though, say, um,

and there's some reason to expect this is true. Of course, that when you walk onto a farm and say we're your single source for everything, you're met with a lot of skepticism. There aren't a whole lot of farmers around the world who want to go to one source. Farmers are very entrepreneurial. They like to play suppliers off one another, so it's not entirely a proven model. Maybe the black Forest ham is a a pipe tream. Maybe I'm mixing

metaphors black Forest Hams and pipe treams. I like the mixture. They they're gonna somehow tease this all apart because we go through these cycles, right, Jason. I mean they put it all together with the help of bankers, and the deal gets done, and then they find out later that they end up with a big ride off from Goodwill and that the deal really the culture to mash something didn't happen. And the idea that these things are you know, I've done and dusted. It's like the hard work is

nowhere near beginning. Yeah, there's a there's a bigger dissimilarity here. And I've spent a little time today talking to some of our analysts and healthcare on the chemicals guy. But what they tell me is, you know, unless you're going to resuscitate the bugs after you kill them, the healthcare business and the herbicides business aren't an obvious fit. Um. And so another set of questions today is around whether

Bear shareholders really want to own both. Management has made the point there's some similarities and how you approach regulators in R and D, but those two pieces are a very dissimilar portfolio at the higher levels. Certainly. Well, I'm so glad you said that, Jason, because I've been feeling kind of like that. I guess it's the obvious question I did. I didn't ask. I just thought, like, as everybody thinks, this is a good idea. But that's exactly

what it struck me, because they are very different. But one of the one of my favorite stories on on the Bloomberg today. Uh, but Monsanto name hated by anti GMO force, is may vanish in a buyer deal. Uh. In Europe, of course, the anti GMO movement has been very, very strong, maybe picking up some steam in the US. We're a farmers stand on that I find very interesting what you said about them maybe not wanting to only go to one supplier, they want to have different suppliers.

How much difference does this make this whole GMO controversy. Well, you know, farmers are very in favor of the technology. It's certainly they've adopted it of their own choice. It's something that has brought them greater profitability in all its shapes and forms in various places. Um. But there is a negative in the mont Santo Um, you know, moving out of St. Louis. If your target markets in the corn belt, Um, you know, I suppose a lot of

the names farmers recognized will be preserved. But I do think that the name change, um, you know, well in the supermarket and among the GMO folks, that maybe it's a positive if it's a dastardly name it is. Um, there's a bit of a bit of challenge um selling this move in the corn belt for sure. Well, having trouble selling at the Bear investors. Bear shares a Bear are down a little bit, almost six percent down five and three quarters up. Mont Santos, yes, they're up significantly

on on this. Mont Santo shares are up a four and a half percent, you know, so it doesn't look as other bear investors believe that seeds and pesticides go together. With Asper, Jason, what's the next thing we're looking for in this deal? What's the next step that has to be taken that we're going to market's gonna be responding to Yeah, I think that, Um, we'll be waiting for another bit. You know, in this situation, you'd imagine Montsanta would would like to be seen to hold out and

at least push a bit higher. Um. But they made the case on their own that these things went together when they were a person agenda. So it's tough to few where it goes. But next, Jason Miner, thank you so very much. Terrific conversation looking at buyer's bid sixty two billion dollars to buy mont Santo. Entrepreneurial farmers may not be on board. Investors wondering about it too. Kathene Hayes, along with pin Fox taking Stock on Bloomberg Radio, Bloomberg

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