(Reuters)— Monsanto has approached Bayer AG to express interest in its crop science unit, including a potential acquisition worth more than $30 billion, according to people familiar with the matter.
The move underscores Monsanto’s unabated expansion drive after Switzerland’s Syngenta AG rejected its takeover approaches last year and agreed earlier this year to be acquired by ChemChina for $43 billion.
It also illustrates Monsanto’s determination to further consolidate its industry, as the global seed and crop protection market continues to suffer from high inventories and low prices for agricultural commodities.
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Monsanto executives met in Chicago recently to discuss the company’s interest in Bayer’s agricultural assets, the sources said. Monsanto sees valuable synergies between its seed business and the crop protection assets of Bayer.
Among the possibilities discussed were an outright acquisition of the crop science unit and a joint venture or other type of partnership between the two companies, the sources said. These talks were preliminary and another meeting has been scheduled for April.
Bayer has been holding the talks with Monsanto to probe its interest, the sources said, but the German company has no plans to actively pursue a sale of its crop science division.
Bayer’s crop science division has businesses in seeds, crop protection and non-agricultural pest control.
It had sales of US$11.7 billion in 2015 and posted adjusted earnings before interest, tax, depreciation and amortization of $2.73 billion.
Bayer is the second biggest player in crop chemicals, with an 18 percent market share, just behind Syngenta, with a 19 percent share.
Monsanto is a leader in seeds, with a 26 percent market share, followed by DuPont with 21 percent. DuPont agreed last year to merge with Dow Chemical.
Bayer said last year it planned to keep its crop chemicals business, saying it was an “integral part” of the German health care group. It has said it aims to concentrate on its core brands in crop protection.
