Bayer and Monsanto executives are working to calm nerves in St. Louis regarding the planned $66 billion acquisition.
In Wednesday's announcement, Bayer said it will keep the combined company’s seeds and traits business in St. Louis, as well as its North American headquarters.
That message was front and center when Liam Condon, head of Bayer’s Crop Science Division, and Robb Fraley, Monsanto’s executive vice president and chief technology officer, sat down with members of the St. Louis media on Thursday afternoon.
Condon said making St. Louis the combined company’s headquarters for North America was an obvious choice.
"Just given the exceptional setup here; that the size and know-how and the size of the business for us it was very clear, this has to be St. Louis," he said.
Monsanto’s $400 million expansion of the Chesterfield Village Research Center is moving forward as planned, according to Fraley. He said several greenhouses were completed this month and the new R&D building is expected to be finished in about a year.
The expectation is that employees from Bayer’s Crop Science Division in Raleigh, North Carolina will be moved to St. Louis.
As for cost saving, Bayer has said it expects to find $1.5 billion in synergies between the two companies over the next three years. What that means for current employees remains to be seen.
"No personnel decisions have been made whatsoever," Condon said. "The whole focus so far has been to get the combination together, get it over the line and start the process of integration."
The companies expect it will take 12-15 months to close on the deal, pending both shareholder and regulatory approval. In the meantime, Bayer and Monsanto must operate independently. Bayer agreed to give Monsanto a $2 billion breakup fee if regulators fail to approve the acquisition.
Consolidation has been happening throughout the ag industry as commodity prices remain low. Fraley, who helped pioneer genetically modified seeds at Monsanto in the 1980s, admitted at one point he thought Monsanto might acquire Bayer.
"Like a lot of Monsanto executives it’s kind of a bittersweet moment, because I’m really proud of what we built, and yet I know to go to the next generation, the next level, we need to innovate for the future,” he said.
Both executives said the companies share similar cultures, including a commitment to community support. Bayer has 12,000 employees in 25 U.S. states, according to Condon. He said they are invested in the places where their workers live.
"It’s actually part of the core DNA of our company that we want to be really strongly embedded in every community where we work," he said.
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