Monsantos leading position in the seeds and genomic s

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Monsanto’s leading position in the seeds and genomic s business stems from a large number of successful R&D endeavours (Monsanto, 2015). Bayer and Monsanto would overlap in terms of R&D. For example, if Bayer wants to move into a new segment and does not have the necessary knowledge and experience, a strategic merger with one of the biggest leaders in that industry would be the right choice, benefitting Bayer from the massive research knowledge of Monsanto. 2.5. “Monsanto” – A Damaged Brand One defining aspect of the negotiation is related to the integration of the Monsanto branding into the Bayer Group. It will be of key importance that Monsanto operations will not retain
7 their present name and instead, operations will be processed under the Bayer brand. Therefore, it is important to convince Monsanto management as well as all staff members about what values Bayer stands for. Even though this decision can only be made after completion of the deal, communication to new staff members and customers will be a key factor for a successful merger. The Monsanto company name has widely become synonymous for genetically modified products, targeted by environmental activists. For this reason, removing the company name Monsanto and positioning its brands under the Bayer umbrella offers large opportunities to positively increase the reputation. The merger is likely to create the biggest agribusiness company in the world and will be of major public interest. In case of a merger, Bayer will need to avoid the image of selling dangerous pesticides or otherwise it will find itself in a similar situation as Monsanto today (Palan, 2016). Summing up, it is not only important to convince current Monsanto workforce, but also the public about Bayer s values and best interest for the society in this deal. On the one hand, new employees need to be committed to working for this new corporation and on the other hand, stakeholders must be convinced that Bayer will be able to manage its responsibilities of being the world s biggest supplier for agricultural businesses. This will be one key element of the negotiation as the poor image of Monsanto is likely to cause problems for the new venture. 2.6. Managing Stakeholder Interests As soon as Monsanto receives an unsolicited potential takeover offer from Bayer, it will increase the pressure for Bayer to close the deal as soon as possible. This is due to the potential public pressure if the information gets leaked or published. The questionable reputation of Monsanto will be of major interest for public media. Therefore, Monsanto gets into the position to increase the asking price in such a situation. Besides, this will likely be at a high premium compared to Bayer s first offer. However, Bayer s financial resources and ability to take risks are limited. The take-over of the drugs business of U.S. firm Merck two years before has gained few successes and thus, will increase further pressure on Bayer board members (Bartz, 2016). Both, the image of Monsanto and limited success with the Merck merger will likely lead to a negative effect of Bayer s stock price if the take-over plans become public.

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