German chemical giant Bayer is looking into a bid for American agro-behemoth Monsanto, Bloomberg reported.
Bayer is leading “preliminary discussions” internally and with advisers, according to Bloomberg sources. It is considering how to finance the deal, including possible assets sales.
If successful, the Bayer and Monsanto agriculture businesses would combine to beat Syngenta as the top seeds and pesticide company, based on data from Statista.com.
Both companies responded to inquiries saying they don’t comment on market speculation.
Investors seem to think the deal would be in Monsanto’s favor.
While Monsanto’s stocks rose some 10 percent Thursday morning, Bayer’s dropped almost 5 percent.
Monsanto’s last year was rather unimpressive on paper. Its net sales were down 5 percent while its net income dropped 16 percent.
Bayer is valued at over $94 billion while Monsanto at close to $40 billion, according to MarketWatch.com.
The takeover may allow the companies to better tackle the competition after two major consolidations in the sector in recent months.
Last year DuPont and Dow Chemical announced a merger that would create a $130 billion giant, if approved by regulators.
Earlier this year, China’s ChemChina bought Swiss Syngenta for $43 billion.
Monsanto sought deals with Bayer and BASF, another major player in the industry, in March, Bloomberg reported. Monsanto was interested in the crop-science businesses of the other companies.
