AGROCHEM MERGERS Bayer-Monsanto Deal Focuses Spotlight on Entire Agro-Chem Industry, Regulators May Step In Current Major Agriculture-Chemical Mergers Under Review + + + In May 2016, Bayer announced its intention to acquire Monsanto in a deal worth $62 billion ChemChina announced in February 2016 a $43 billion deal to acquire Syngenta In late 2015, Dow and DuPont announced an agreement to consolidate, with the resulting merged company at nearly $130 billion Analysis If all mergers were to be approved and completed, 70% of the global pesticide market and 83% of the US corn seed market would be under the control of three consolidated corporations The companies have collectively acquired more than 200 businesses globally since the mid-1990s and have emerged as the six major players in their sector Regulators are expected to step in as the resulting mergers would likely result in higher price tags for both farmers and consumers as a result of significantly reduced competition Sources: Christopher Alessi, “Bayer Makes $62 Billion Bid for Monsanto,” Wall Street Journal, May 23, 2016; Zeeshan Athar, “Monsanto-Bayer, Syngenta-ChemChina, Dow-DuPont: Which Merger is More Likely?” Business Finance News, May 21, 2016; Mark Anderson, “Bayer’s Proposed Monsnato Takeover Should Rouse Global Regulatory Scrutiny,” Sacramento Business Journal, May 20, 2016; Diane Bartz and PJ Hufstutter, “Rush for Ag-Chem Megadeals Clogs Regulatory Path, Worries Farmers,” Reuters, May 20, 2016. May 23, 2016 | Justin C. Brown

MONSANTO/BAYER MERGER Bayer Offers to Buy Monsanto, Would Become Largest Agro-Chem Deal in a Year of Mega-Mergers Details on the Bayer/Monsanto Merger Analysis In late May, Bayer AG made an unsolicited offer to acquire Monsanto for $62 billion in cash. If Monsanto accepts the offer it would become the largest foreign takeover by a Germany company in the country’s history The deal comes amidst a period when global agrochemical companies are consolidating due to a mixture of market factors including a drop in commodity prices and the growing convergence between seeds and pesticides markets + Opponents of the Merger “The Bayer-Monsanto talks only heighten the possibility that the industry, farmers and consumers could be adversely impacted by this consolidation trend.” – Sen. Chuck Grassley (R-IA) National Farmers Union president Roger Johnson stated that the union will likely oppose the deal as the union previously opposed the merger of two other agro mega-corporations: DuPont and Dow. Sources: Christopher Alessi, “Bayer Makes $62 Billion Bid for Monsanto,” Wall Street Journal, May 23, 2016; Ludwig Burger and Georgina Prodhan, “Bayer Defies Critics With $62 Billion Monsanto Offer,” Reuters, May 23, 2016; Mark Anderson, “Bayer’s Proposed Monsnato Takeover Should Rouse Global Regulatory Scrutiny,” Sacramento Business Journal, May 20, 2016; Diane Bartz and PJ Hufstutter, “Rush for Ag-chem Megadeals Clogs Regulatory Path, Worries Farmers,” Reuters, May 20, 2016. May 23, 2016 | Justin C. Brown