German company Bayer has reportedly discussed making a bid for the US agrochemical firm Monsanto. A merger between the two chemical behemoths could create the largest entity in a rapidly consolidating sector.
Bayer, a pharmaceutical company also heavily involved in crop science, is reportedly considering a $40 billion (35 billion euros) bid for the US agricultural technology giant Monsanto, according to financial news agency Bloomberg.
The merger "would create the world's largest supplier of seeds and farm chemicals," Bloomberg reported Thursday. Monsanto is a leading manufacture of herbicides, pesticides and modified seeds.
People close to the matter said Bayer management had held preliminary, internal discussions about the possible bid. Both corporations have yet to comment on the report. Alternate options to a buy-out - such as joint-ventures - are reportedly in consideration as well.
Monsanto shares shot up double digits on Thursday following the reports. Meanwhile in Frankfurt, Bayer stocks have suffered their largest slide since January.
Rumblings of a possible buy-out floated around in March, with Monsanto then saying that it sought to buy rather than be sold. It made a push last year to buy the Swiss company Syngenta for $43 billion, though it was rebuffed.
Rush to consolidate
The chemical giant BASF, also based in Germany, is reportedly expected to place a competing bid for Monsanto, according to StreetInsider.com.
Low commodities prices have squeezed both farmers and their agrichemical suppliers. The latter have increasingly sought to consolidate to weather the tough times.
DuPont and Dow Chemical announced a merger worth $130 billion last year and Syngenta accepted a $43 billion buy-out bid from China National Chemical Corp earlier this year, after rejecting Monsanto's bid.
Not wanting to be left more isolated, BASF is expected to put up a fierce fight for the chance to join up with Monsanto.
jtm/uhe (AFP, dpa)