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Bayer-Monsanto pledge investment, jobs after Trump meeting
[WASHINGTON] Bayer AG and Monsanto Co promised President-elect Donald Trump US$8 billion of investment in the US and thousands of new jobs should the companies' planned merger, the biggest-ever in agriculture, clear regulatory approvals.
Bayer chief executive officer Werner Baumann promised to add 3,000 jobs at Monsanto while keeping its headquarters in St Louis after the deal is completed, Trump spokesman Sean Spicer said Tuesday.
Both companies had previously announced their intention to keep the location of the Monsanto offices, but the commitment on jobs is new, and follows a visit last week by both Baumann and Monsanto CEO Hugh Grant to Mr Trump and his aides in New York. The CEOs said in a joint statement that "several thousand new high-tech well-paying jobs" will be added after the integration of the two companies.
US businesses are facing more pressure to show that they're creating American jobs ahead of Friday's scheduled inauguration of Mr Trump, who made the issue a signature of his campaign. Earlier on Tuesday, he praised General Motors Co for a US$1 billion American investment plan, having criticised the company earlier in January for importing some models from Mexico.
On Tuesday, Wal-Mart Stores Inc also boasted about job growth. Ford Motor Co and Fiat Chrysler Automobiles NV announced spending plans last week that Mr Trump lauded.
The proposed US$66 billion takeover of Monsanto by Germany's Bayer would create the world's largest producer of pesticides and genetically modified seeds. The merged company expects to spend about US$16 billion in research and development in agriculture in the next six years, with at least half of the investment made in the US, Bayer and Monsanto said in their statement Tuesday. The two companies spent about US$5.9 billion combined on R&D in 2015, data compiled by Bloomberg show.
Mr Trump rode to his election victory partly on strong backing from rural voters, which could increase the President-elect's desire to bring an economic turnaround for those supporters. A year ago, Monsanto announced that it would shed 3,600 jobs, or about 16 per cent of its global workforce, in a bid to lower costs. The company is already the world's biggest seed producer.
Agricultural companies could also come under increased scrutiny as a wave of mega-deals announced in the past year has the potential to transform the industry. Critics have raised antitrust concerns about Bayer-Monsanto, but the companies have argued the merger will speed innovation and help farmers increase their yields.
The National Farmers Union, the second-biggest US farm group, is among those that oppose the deal. In a statement Tuesday, it said the meeting between the CEOs and president-elect "is deeply disturbing if it leads to an approval of the Bayer-Monsanto acquisition by the incoming Trump Administration."
Still, the meeting is "positive" for getting US approval, though the merger still needs regulatory approval in other countries, Chris Shaw, an analyst at Monness Crespi Hardt & Co in New York, said by phone.
Bayer and Monsanto's plan to stay and invest in the US Midwest is key to its business, since it would market to farmers, but also lines up with Mr Trump's rhetoric, said Jason Miner, an analyst at Bloomberg Intelligence in Skillman, New Jersey.
"It's good politics and good business strategy at once," Mr Miner said.