The merger of Aventis Crop Science and Bayer into Bayer Crop Science is expected to receive regulatory approval within the next few months, according to Aventis officials speaking at the 2002 Beltwide Cotton Conference.
“We're expecting approval in April or May. Until then, we plan to continue serving our farmer-customers as Aventis Crop Science,” said Al Luke, Aventis Cotton Business Manager in Raleigh, N.C.
The change to Bayer Crop Science is currently being reviewed by federal regulatory agencies, and Luke said the expectations are that the approval process will go off without any delays or hindrances. “There shouldn't be anything in the purchase that would prevent a speedy approval,” he said.
Bayer announced its intentions last Oct. 2 to buy Aventis CropScience for an estimated $4.9 billion. The proposed merger is the largest acquisition in Bayer's history and significantly expands the company's crop protection business.
“We will be able to provide a better value for the grower with this merger, because we will be able to offer a greater number of products at a good value to the producer,” Luke said. “Just as cotton growers are squeezed financially, so too are technology developers. To be able to invest in the research and development demanded by the marketplace, we need a breadth of products to support that effort.”
Bayer said it will separate its current health care business and the new combined crop protection group into two independent corporate units. Doing this, the company said, will allow it greater flexibility for necessary strategic partnerships. The merged crop protection company is expected to employ 23,000 people.
According to Bayer officials, the new structure in no way represents a departure from its proven four-pillar strategy. Bayer, they say, will retain health care, agriculture, polymers, and chemicals as its core activities but gain greater competitiveness and drive by organizing some of these businesses differently.
Bayer is expected to increasing borrowing and slash approximately 4,000 jobs as a result of the acquisition. Aventis CropScience, which is owned jointly by Aventis and Schering, will assume approximately $1.7 million in debt in the deal.
The acquisition is expected to increase Bayer's profits, at least partly due to the $460 million in anticipated cost savings due to the consolidation of overlapping research and business operations.
Aventis CropScience currently employs about 15,300 people in more than 120 countries worldwide and Bayer's crop protection business group employs approximately 7,800 people.