Glacier FarmMedia COVID-19 & the Farm

BASF says not backed into corner by Bayer’s Monsanto swoop

German firm expects Monsanto to honour collaboration agreements

BASF
(BASF.com)

Ludwigshafen, Germany | Reuters — BASF, which has so far kept out of a consolidation push among global seeds and pesticides groups, said its business model was not affected by rival Bayer’s plans to buy Monsanto.

“We are not backed into a corner by what is happening in the market,” the group’s deputy chief executive Martin Brudermueller said at a news conference on BASF’s research and development efforts at its headquarters in Ludwigshafen in southern Germany.

Bayer made an unsolicited US$62 billion offer for Monsanto in May, aiming to create the world’s biggest agricultural supplier. Monsanto turned it down but said it was open to further talks. The two companies have since sat down to try to negotiate a deal.

Brudermueller said BASF’s crop chemicals business was highly profitable and innovative and also “not quite small.”

BASF, the world’s largest maker of industrial chemicals by sales, commands seven per cent of the world’s combined pesticides and seeds markets but risks relegation to a second-tier position given rivals’ merger plans, according to A.T. Kearney data.

A Monsanto-Bayer deal would add Monsanto’s 15 per cent market share in global seeds and pesticides to Bayer’s 12 per cent, creating an undisputed market leader. The planned merger of U.S. groups Dow Chemical and DuPont would combine seven per cent and 11 per cent, respectively.

Syngenta, which is being bought by ChemChina, has a 14 per cent market share.

BASF has so far focused on crop chemicals, unlike its rivals who are combining or want to combine seeds and chemicals businesses. This combination is one of the main drivers of Bayer’s plan for a tie-up with Monsanto, the market leader in seeds.

BASF is the world’s third-largest maker of farming pesticides. Its plant biotechnology unit, which does not disclose financial results, is developing improved plant characteristics such as drought tolerability but relies on partners, the biggest being Monsanto, to bring finished seed products to market.

“We expect contracts to be honoured of course, should there be a new owner,” Brudermueller said, when asked about repercussions on any Bayer takeover on its alliance with Monsanto.

Reporting for Reuters by Patricia Weiss; writing by Ludwig Burger.

Tagged , , , , ,
COPA Medallion COPA finalist in 2012, 2014 and 2015.
©2021 AGCanada is a production of Glacier FarmMedia Limited Partnership. Any affiliated or third party content is the property of its respective owner and is used with permission.
Please refer to Copyright Page for details.
Click here to view our Website Terms of Use.