BREAKING NEWS: Bayer Could Pledge Billions to U.S. Investment and New Jobs if Monsanto Deal Wins Approval
German chemical giant Bayer AG is promising President-elect Donald Trump billions of dollars in research and development spending in the U.S., as well as what it is saying will be a significant commitment to create jobs, if its planned merger with Monsanto Co. (MON) receives the necessary regulatory approvals to proceed, the FOX Business Network has learned.
The commitment was made by Bayer’s CEO Werner Baumann and Monsanto chief Hugh Grant after days of negotiations with the President-elect and his senior transition staff, according to people with knowledge of the matter. Last Wednesday the pair of CEOs met with the incoming President at New York’s Trump Tower, where both executives discussed some of the benefits of the deal, which will need U.S. and European Union regulatory approval to proceed, these people say.
The exact nature of the commitment could not be immediately determined, but people with knowledge of the negotiations say company executives are pitching it as significant. Bayer is willing to create a multi-billion dollar spending package in the U.S., mostly focused on research and development, and produce jobs that one analyst says over time could meet or exceed the 800 jobs that Carrier Corp., agreed to keep in the U.S. after negotiations with the President-elect weeks ago.
There will be a key difference in the Bayer negotiations with Trump officials: the Carrier jobs came after the company received significant tax incentives provided by the state of Indiana, the site of its air-conditioning manufacturing plant that was looking to outsource jobs to Mexico. The jobs that Bayer is promising to create are expected to be new jobs, without such incentives.
Company officials had no immediate comment; a Trump spokeswoman didn’t return numerous phone calls about the matter. Trump transition officials are expecting to announce the jobs and spending commitment sometime Tuesday morning.
Since the $66 billion deal was announced last summer, investors have been skeptical it would receive the necessary approvals from the EU and the U.S. Justice Department’s Antitrust Division when the Trump administration takes control of the White House after Friday’s inauguration.
The New York Post Opens a New Window. recently reported that a similar deal between Dow Chemical and DuPont might get nixed because of anti-trust concerns both in the U.S. and abroad.
Last Friday, shares of Monsanto closed at $107.65, significantly below the $128 per share price tag Monsanto agreed to pay for the St. Louis-based agricultural company.
While both CEOs are hopeful that the DOJ and EU will approve the deal, there has been no recent official statement from either U.S. regulatory officials or the European governing body on whether they believe the merger should be allowed to commence.
Among the issues that might raise regulatory concerns both in the U.S. and the EU are the size of the combined entity and whether the new company would create a monopoly that can raise the prices of its products without significant competition, thus squeezing consumers.
Another concern is the controversy surrounding Monsanto’s production of genetically modified organisms or GMOs – a technology that can mass produce food at a relatively low cost. The seed-producing giant has received a wave of criticism from those who believe the development of these crops could lead to severe health problems for those who consume them.
Since Wednesday’s meeting with Baumann and Grant, Trump has continued to meet with business leaders, imploring them to create and keep jobs in the U.S. On Thursday, Trump met with AT&T (T) CEO Randall Stephenson, who is trying to complete a controversial merger with Time Warner(TWX), which owns the cable news channel CNN.
Trump was at war with CNN throughout his presidential campaign but is even more so of late after the news channel published a report about so-far unsubstantiated claims that the President-elect engaged with Russian leaders and operatives to manipulate the 2016 election. Trump has vehemently denied the story.
Some investors believe that Trump’s battle with CNN may be a stumbling block for the AT&T-Time Warner merger. But, AT&T issued a statement that the merger wasn’t discussed during Stephenson’s meeting with Trump, which the company said focused on “job creation and the regulatory impact that companies, like AT&T, have on the ability to create jobs and spur further economic growth.”