The German-based Bayer Corporation announced the acquisition of U.S.-based Monsanto for $66 billion all-cash Wednesday in a move to create the world’s largest seed and chemical industry to-date.
Monsanto, tweeting Wednesday that it will work together with Bayer to build on shared values, holds the largest number of patents on seeds with ownership of roughly one-quarter of the world’s supply and distribution under their control.
Yesterday U.S. Sen. Rob Portman (R-OH) said the acquisition is another example of the dire need for tax reform in the United States.
“The trend of foreign businesses acquiring U.S. firms has become all too familiar and is growing: acquisitions of American companies by foreign firms are at a record high, up 7 percent from last year. Unfortunately, when our companies are acquired by foreign businesses, all too often, jobs go overseas with them,” said Portman.
He authored a Senate Permanent Subcommittee on Investigations report last year that showed how three U.S. businesses acquired by foreign corporations caused jobs and manufacturing to leave the country. Those three acquisitions reportedly cost the country 2,370 jobs and $16.5 million in yearly contract manufacturing.
Monsanto employs more than 22,000 people throughout the world, according to its website. The corporation said in a statement that it’s committed to maintaining a strong presence in the United States.
Sen. Portman said the acquisition is a symptom of an underlying problem that needs to be cured: “a tax code that is too complicated, too burdensome, and decades out of date.”
According to a press release, Portman released a bipartisan international tax reform framework earlier this year with Sen. Charles E. Schumer (D- New York) that would encourage job creation and investment in the U.S.
Bayer AG’s goal, according to a statement by Liam Condon, head of its crop science division, is to feed three billion more people by 2050 by helping growers to produce more with less.
To finance the transaction, Bayer said $19 billion in equity will be raised through issuing bonds and subscription rights. More than $50 billion in financing has been promised from Bank of America Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan.
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