Monsanto, a company based in St. Louis for more than 100 years, is now part of Bayer.
The roughly $63-billion acquisition closed Thursday, nearly two years after the companies first announced the deal. Regulators in Canada and Mexico were among the last international watchdogs to approve the combination.
The U.S. Department of Justice signed off on it late last month after Bayer committed to shedding about $9 billion in several areas to chemical giant BASF.
That includes Bayer's Liberty-brand herbicides, which compete with Monsanto's Roundup.
The German company announced this week that the Monsanto name will be retired once the deals involving BASF are complete.
"We simply had a strong belief that the Bayer brand has a very strong, positive recognition, simply based on brand audits that we've done worldwide," Bayer Crop Science Division President Liam Condon told reporters during a conference call a few days ago.
Monsanto is a global leader in seed research and plants, while Bayer’s strong suit is crop protection. The German company has committed to putting its crop sciences division in St. Louis, where Monsanto had nearly 5,400 workers.
“If you bring this together and have on top a fantastic digital-ag platform, this is a great combination to create more innovation,” said Condon not long after the deal was announced in 2016.
He has been bullish on the St. Louis area – especially with the research operation in Chesterfield and the business headquarters in Creve Coeur.
“Just given the exceptional setup here - the size and the know-how. The competence that's here, and the size of the business. For us, it was very clear it has to be St. Louis.”
Monsanto’s outgoing Executive Vice President and Chief Technology Officer Robb Fraley has stated ever since the 2016 announcement that Bayer will have a deeper commitment to the area.
“Nobody spends $65 or $66 billion to buy a company if nobody likes what you're doing,” he said. “And what we do is innovate, and it's all right here in St. Louis.”
Fraley and other senior Monsanto leaders, including Chief Executive Officer Hugh Grant, have announced they will be leaving now that the Bayer deal is done.
Bayer’s global seeds-and-traits business will be based here, and North American operations will be run out of the Creve Coeur facility, which has been the longtime headquarters of Monsanto.
“They've been rooted in the community since the ‘50s, and it creates a sense of stability,” said Barry Glantz, the mayor of Creve Coeur.
While he’s optimistic about Bayer’s commitment to the region, he said there’s bound to be change.
“We've been assured by executives at both Monsanto and Bayer that for the time being, things are going to remain pretty much the status quo,” he said.
What does it mean for farmers?
Farmers in the region are hopeful the massive merger will benefit agricultural innovation, not slow it down.
“That’s the part that I think bothers us the most,” said Chad Schutz, who operates a 2,000-acre farm in White Hall, Illinois, about 90 minutes north of St. Louis. “You just hate seeing that competition shut down, because that’s what is driving innovation.”
The Bayer-Monsanto combination follows similar deals among agricultural heavyweights Dow and DuPont, along with the merger of Syngenta and ChemChina.
“If it wasn’t for those companies, we’d be producing half and using twice as much stuff,” said Schutz, whose farm has been in his family since relatives arrived from Germany in the 1850s.
“So I really think innovation has been driven by those companies.”
Todd Hays operates a farm in northeast Missouri. He has roughly 2,400 acres of corn and soybeans on the family farm. Hays also has concerns about less competition in the agricultural sector but thinks the Bayer acquisition should be a positive for farmers and future innovation.
“They can streamline and do a better job and hopefully develop and bring more, newer technology to market quicker.”
Technological advancement has been at the heart of the multi-billion-dollar deal since it was announced in 2016, and officials from both companies have said it should be good for leading-edge agricultural concepts.
At least one farmers' group is not convinced, especially with the wave of consolidation.
"It stymies innovation in this space," said Rob Larew, senior vice president of the National Farmers Union.
"All around, this is just not good news for farmers who are already facing trouble," he added, pointing to low crop prices and increasing operating costs.
But farmers like Chad Schutz hope Bayer backs up its statements with action and will build on the history of advancements by Monsanto and other companies.
“I know they get a bad rap, but they're doing some amazing work.”
St. Louis Public Radio Economic Development Reporter Melody Walker contributed to this report.
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