U.S. stocks mostly up as Monsanto surges on takeover talk

Multibillion dollar seed company Monsanto was right in the thick of premarket trading in NY on Thursday, after reports emerged that German chemical conglomerates BASF or Bayer are considering a takeover bid.

Bloomberg reported that Bayer is exploring a potential bid for Monsanto, citing people familiar with the matter, while multiple reports said BASF was is working with investment banks on another bid.

Coupled with the Dow-Dupont merger, the deals have left Monsanto exposed and led Bayer and its German rival BASF to look at various scenarios for their agribusiness units. As reported by Bloomberg, the company had senior-level discussions within its management, and with the advisors for this acquisition.

Switzerland’s Syngenta previous year rejected an unsolicited offer from Monsanto, later agreeing to be bought by China National Chemical Corp. for $43 billion. In March, Monsanto slashed its earnings forecast for 2016.

Monsanto’s net income fell by 15.5% in 2015 as a slump in agricultural commodities hurt sales, which fell 5.4% to $15.0 billion. Dow’s Agricultural Sciences sales clocked in at $1.65 billion in the first quarter, down 12% year over year.

A deal with Bayer would help the company reduce its reliance on the agriculture industry, while Monsanto would strengthen Bayer’s seed business, one of the company’s priorities. Monsanto also pursued Syngenta to add to its own chemicals business.

Monsanto is valued at around $43bn (£30bn), while Bayer is said to be worth around €79bn ($90bn).

Bayer, based in Leverkusen, Germany, has more than 150 years history.