Monsanto-BayerAG

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
ekid
Posts: 910
Joined: Tue Dec 18, 2007 3:10 pm
Location: central Indiana

Monsanto-BayerAG

Post by ekid »

Buyout offer for MON, and I have Monsanto; just over 200 units.

Never been in this situation before, what to do?
I bought for ultra long term investment- multi-generational if possible, I'm that confident in bioengineering crop science.

Just ignore the whole thing?
hoopy
Posts: 108
Joined: Sat Jul 06, 2013 6:26 pm

Re: Monsanto-BayerAG

Post by hoopy »

I would just keep it.

If the merger goes through, you get your portion of the all-cash offer, which you can reinvest however you see fit.

If the merger fails, you still own the stock, no need to change your plan.

I also own Monsanto, it's the only individual stock I own.
User avatar
JoMoney
Posts: 16260
Joined: Tue Jul 23, 2013 5:31 am

Re: Monsanto-BayerAG

Post by JoMoney »

I remember a few years ago people complaining about Buffet buying up all the big consumer staple companies that many considered dividend "staples" for people into dividend stocks. Berkshire Hathaway doesn't pay a dividend and it messed with their plans to buy and hold forever... Such is life...
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
BW1985
Posts: 2079
Joined: Tue Mar 23, 2010 6:12 pm

Re: Monsanto-BayerAG

Post by BW1985 »

I would sell it. But then again I would never have invested in Monsanto in the first place.
Chase the good life my whole life long, look back on my life and my life gone...where did I go wrong?
Topic Author
ekid
Posts: 910
Joined: Tue Dec 18, 2007 3:10 pm
Location: central Indiana

Re: Monsanto-BayerAG

Post by ekid »

It has become practically impossible to farm without Monsanto's products. Dupont/Pioneer pays them for their technology; maybe Syngenta also. New tech is slowly coming to market and although MON dividend is not so much, I expect substantial appreciation over decades term.
Crop science is not sexy beside the human biologicals, or digital/communication, but it will benefit from any biological research.
btenny
Posts: 5702
Joined: Sun Oct 07, 2007 6:47 pm

Re: Monsanto-BayerAG

Post by btenny »

It depends. Do you have big capital gains in the stock? Is the offer a big premium over the previous stock price? Is the offer a cash offer for your stock or an exchange of Bayer stock shares for shares of Monsanto stock? The issues are usually complex and not clear at first. So I would read the message board on Yahoo.com on Monsanto and Bayer and see if the people there understand the offer and how it will be treated for tax purposes. Then depending on your situation decide if selling now is the better plan or waiting for the offer to close. Many times take over offers are done in increments so selling at the first offer is bad. There is usually a second or third offer for more money before the deal closes. Other times the deal falls apart and then the stock drops back to the pre-merger price and those that sold early did good.

So I would suggest doing some homework. Good Luck.
Topic Author
ekid
Posts: 910
Joined: Tue Dec 18, 2007 3:10 pm
Location: central Indiana

Re: Monsanto-BayerAG

Post by ekid »

There's been a raised offer already. $122-all cash, which is only just over the yearly high.

but the high today is only $109; the market seems to be doubtful the deal will go thru? I bought it somewhat less a few years ago, but following the recent years farm loss MON has lost altitude, so my cap gains are really not substantial.

WSJ columnists are doubting the deal will pass SEC scrutiny.
User avatar
Electron
Posts: 2658
Joined: Sat Mar 10, 2007 7:46 pm

Re: Monsanto-BayerAG

Post by Electron »

Monsanto shareholders with unrealized capital gains might have preferred Bayer stock rather than cash. Bayer ADRs (BAYRY) currently pay a higher dividend yield than Monsanto although foreign tax withholding would likely apply. Based on the current price of Monsanto shares, investors do seem skeptical that the merger will complete.
Enjoying the Outdoors
ourbrooks
Posts: 1575
Joined: Fri Nov 13, 2009 3:56 pm

Re: Monsanto-BayerAG

Post by ourbrooks »

Sell your Monsanto stock ASAP and invest the money in an index fund.

Picking individual companies is hard; picking high tech companies for the long term is practically impossible. Whatever happened to Radio Corporation of American and Digital Equipment Corporation? Heard of any recent breakthroughs at Bell Labs?

The writing is pretty much on the wall for Monsanto. They're negotiating for a higher price from Bayer. If they really thought that their current businesses had long term prospects, they'd be trying to stay independent, or, if they thought that the merger with Bayer was really synergistic, they'd quickly have agreed to a lower offer. The merged company is going to have only one set of executives; the negotiations for the merger sound like the Monsanto management is going to take their money and run.

Even if the merger does take place the future directions of the company will be some compromise across their business areas. What if the new management decides that there's lots more money in pesticides than in seed genetics? Would that still be what you have in mind?

I can't disagree with the OP about the importance of bioengineering in agriculture, but it could well be the case that the technology continues to make great strides without any one company staying on top.
Topic Author
ekid
Posts: 910
Joined: Tue Dec 18, 2007 3:10 pm
Location: central Indiana

Re: Monsanto-BayerAG

Post by ekid »

" more money in pesticides than in seed genetics?"

The whole technique is a combination of the two. (Except for the corn borer defense.)
And possible future developments. I hope for revolutionary new stuff across all life sciences.
The idea is still in its infancy.

It's true the R&D companies will benefit more than the farmer, so I want to own THEM! As well as my farm-
then benefit three ways; the last as a consumer.
Topic Author
ekid
Posts: 910
Joined: Tue Dec 18, 2007 3:10 pm
Location: central Indiana

Re: Monsanto-BayerAG

Post by ekid »

I do have lots of index funds- the vast majority, and Monsanto is included in them; also Bayer in my international.

I'm just tilting.
User avatar
Electron
Posts: 2658
Joined: Sat Mar 10, 2007 7:46 pm

Re: Monsanto-BayerAG

Post by Electron »

Monsanto has quite an interesting history going back to 1901. The company today with symbol MON is actually the New Monsanto which was a spin-off from Pharmacia.

https://en.wikipedia.org/wiki/Monsanto# ... nd_mergers

Click on "Show" at the bottom right to see a detailed pictorial.

Prior to late 1999 Monsanto traded with symbol MTC. Monsanto acquired G.D. Searle & Company in 1985. Investors holding MTC received shares of Solutia following the spinoff in 1997. Monsanto merged with Pharmacia & Upjohn in late 1999. The Monsanto subsidiary was then spun off in 2000 to create the New Monsanto. Pfizer bought Pharmacia in 2003. Holders of MTC saw most of their investment become shares in Pfizer.

Note that Monsanto agreed to indemnify Pharmacia against any liabilities that might result from judgments against Solutia and the old Monsanto. A $700M settlement was paid in 2003 related to PCB contamination.
Enjoying the Outdoors
Rainmaker41
Posts: 733
Joined: Tue Apr 26, 2016 11:34 am

Re: Monsanto-BayerAG

Post by Rainmaker41 »

Monsanto just rejected the offer apparently.

http://www.reuters.com/article/us-monsa ... SKCN0YF1ZG
85% Global Stock, 15% US Fixed Income
User avatar
Doc
Posts: 10607
Joined: Sat Feb 24, 2007 12:10 pm
Location: Two left turns from Larry

Re: Monsanto-BayerAG

Post by Doc »

Electron wrote:Monsanto has quite an interesting history going back to 1901. The company today with symbol MON is actually the New Monsanto which was a spin-off from Pharmacia.
I worked for Monsanto back in the days when they wanted to acquire a pharmaceutical house because they want to expand into higher margin products rather than commodity chemicals. One day I lent a college $100 in cash because he had only two hours to catch the company plane for a flight to Switzerland and only had time to pick up his prepacked bag and no time to go to the bank. :D That deal didn't come to anythinh but Monsanto kept trying. After I left I was interested that Monsanto finally acquired its pharmaceutical house and spun off its commodity chemicals. Then I really laughed when their new partner took control of the good parts that were left and then got rid of Monsanto was making it only a seed company.

But my pension plan is well funded and I sold my Monsanto stock decades ago so the Bayer deal is just a yawn.

However, bio-engineered food crops are outlawed or at least frowned upon in Europe. If these product were to be produced by a German firm that might change and the growth potential could be very large. If the buyout was a stock swap I would grab it. If it's a cash offer the tax consequences might be very important.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
User avatar
Ged
Posts: 3945
Joined: Mon May 13, 2013 1:48 pm
Location: Roke

Re: Monsanto-BayerAG

Post by Ged »

Doc wrote: However, bio-engineered food crops are outlawed or at least frowned upon in Europe. If these product were to be produced by a German firm that might change and the growth potential could be very large. If the buyout was a stock swap I would grab it. If it's a cash offer the tax consequences might be very important.
It's useful to note that the bans on GMO crops in Europe are on a per country basis. Some allow them, others do not. For example Spain grows large amounts of GMO Maize while France bans it.

Germany is VERY antagonistic towards GMOs. In 2015 they banned cultivation of GMOs on German soil completely despite the fact BASF is in that business. BASF is moving its GMO R&D to the US from Germany because of this.

I guess that may be one reason Bayer is interested in Monsanto. They are in the US rather than in Germany.
neilpilot
Posts: 5005
Joined: Fri Dec 04, 2015 12:46 pm
Location: Memphis area

Re: Monsanto-BayerAG

Post by neilpilot »

Ged wrote:
Doc wrote:Germany is VERY antagonistic towards GMOs. In 2015 they banned cultivation of GMOs on German soil completely despite the fact BASF is in that business. BASF is moving its GMO R&D to the US from Germany because of this.
Has moved; they announced the move back in 2012. BASF plant biotechnology in now HQed at Research Triangle Park, North Carolina. In fact, they just recently announced a 350 job reduction. Their focus going forward will be in plant biotechnology research on high-potential projects in herbicide tolerance and fungal resistant soybeans.

......from someone who retired from BASF 10 months ago
User avatar
Doc
Posts: 10607
Joined: Sat Feb 24, 2007 12:10 pm
Location: Two left turns from Larry

Re: Monsanto-BayerAG

Post by Doc »

neilpilot, that is not my quote.
Doc wrote:However, bio-engineered food crops are outlawed or at least frowned upon in Europe. If these product were to be produced by a German firm that might change and the growth potential could be very large. If the buyout was a stock swap I would grab it. If it's a cash offer the tax consequences might be very important.
Thanks for the thoughts but I screw up enough on my own without anyone else's help. :beer

(FWIW on this board if you quote a post that has an embedded quote from someone else the attributions foul up.)
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
Topic Author
ekid
Posts: 910
Joined: Tue Dec 18, 2007 3:10 pm
Location: central Indiana

Re: Monsanto-BayerAG

Post by ekid »

Interesting.

European high tech companies want to move out to a more congenial business environment- and US companies want to move the opposite way to a more congenial tax environment.

Re: Monsanto history. After the initial idea/discovery of applied bio/engineering they completely shed commodity chemicals which were low profit and transformed to 100% (or nearly) life science. Dupont bought Pioneer Seeds and now gets most of its profits there.

And Syngenta is now owned by...China Chemical?
ourbrooks
Posts: 1575
Joined: Fri Nov 13, 2009 3:56 pm

Re: Monsanto-BayerAG

Post by ourbrooks »

The new DowDupont agriculture company will be almost the same size in seeds as Monsanto and larger in pesticides: http://seekingalpha.com/article/3902056 ... ant-making

Very handy of them to separate out their business this way. In the past, to own Dow and Dupont's life sciences businesses you'd have had to own parts of things like their floor covering businesses. From an investment perspective, that probably wasn't such a bad idea; at least, recently, the life sciences parts of their businesses haven't been doing that well and one view of the merger/reorganization is that it's a way for the profitable businesses to dump the unprofitable parts.
User avatar
Electron
Posts: 2658
Joined: Sat Mar 10, 2007 7:46 pm

Re: Monsanto-BayerAG

Post by Electron »

Monsanto history
I found the history of Monsanto quite interesting as well as the background on my particular shares. My father purchased 50 shares of Lion Oil Company in 1950. Monsanto Chemical Company bought Lion Oil in 1955 which included a chemical division. Each share of Lion Oil was exchanged for 1.5 shares of Monsanto Chemical Company. Small lots were then purchased over the next twenty years. Records show a 2% dividend and it looks as though there was a dividend reinvestment plan in place.

Lion Oil was later sold to Tosco and the company appears to still exist today. Monsanto was known as the Monsanto Chemical Company from 1933 through 1964.

Here is an article with more information on Monsanto going back to 1901. The article mentions that Monsanto was a major producer of aspirin from 1917 through the 1980s.

http://www.takepart.com/article/2014/03 ... o-timeline
Enjoying the Outdoors
Post Reply