Monsanto in uncertain marriage

Oct 5, 2016

Monsanto announces fourth-quarter earnings Wednesday, amid a time of considerable uncertainty for the seed and chemical giant. 

Monsanto and Bayer announced last month they plan to merge, in a $66 billion deal. But it’s not a done deal. 

It’s not clear that government regulators will approve Bayer’s proposed takeover of Monsanto.

"This is a big-time merger between two big-time players who have large market shares,” said Vincent Smith, who teaches economics at Montana State University. “It could be one year or two years before there’s a decision on this merger.”

Smith said government regulators are worried about the size of the combined company.

In the meantime? Monsanto has to keep humming along, in a tough environment. Crop prices have fallen, and cash-strapped farmers can’t afford Monsanto’s fancy new seeds.

Plus, the company might have trouble holding on to its top scientists.

"When there’s uncertainty in your current employer, that is going to increase the appeal of other jobs that may have more certainty,” said Jayson Lusk, an agricultural economist at Oklahoma State University.

Lusk said Monsanto could counter the uncertainty. By stressing the benefits of the merger. Like more resources, for scientists.