If you were cynical under President Trump’s administration you would say although President Trump ran under a different platform, as soon as he won business would get bigger. Companies that have monopoly or near monopoly positions will emerge stronger in the President’s administration. The cabinet and appointments to regulatory bodies reflect the position and it is not surprising Bayer wins US approval to buy Monsanto.
According to Ludwig Burger and Diane Bartz of Reuters the company many people know for aspirin is buying the company known for GMO seeds. The reason why the companies are getting together is Bayer is the world’s second largest crop-chemicals business with Monsanto’s industry leading seeds business. The company will have sales of $30 billion and its competitors will be DowDuPont’s Cortea Agriscience at $18.6 billion; ChemChina’s Syngenta at $16.5 billion; and BASF at $11.8 billion.
In the US, the Department of Justice Anti-Trust Division has signed off on the merger after Bayer agreed to sell $9 billion in assets. Bayer has since said the expected synergies from the merger will be $300 million less because of the need to sell more than expected assets.
Linking to dividend paying stocks, sometimes but not always being cynical about the motives of the company helps you make decisions. If you are cynical about President Trump opening the doors to creating larger business, then you might see opportunities to make money, whether it is good US policy or good self interest or not. Political administrations will come and go, but the opportunity to make money and try to both limit competition and gain monopoly like conditions on the ability to raise prices is a thing of beauty.
There are more questions than answers, till the next time – to raising questions.