The closing sets the stage for the 117-year-old agribusiness brand name “Monsanto” to be dropped by Bayer. Monsanto’s efforts to promote genetically modified crops have been the subject of much controversy from anti-GMO activists, and the U.S. company has spent millions of dollars over the years on brand and corporate ad campaigns to improve its overall image.
“Monsanto is kind of the poster child for a larger movement against GMO,” said Kathryn Paul, associate director of the Organic Consumers Association, a consumer advocacy organization and longtime critic of Monsanto. The nonprofit also has a pending lawsuit against the company’s Roundup herbicide brand.
In a statement issued Thursday, Monsanto said: “We’re extremely proud of all we’ve accomplished as Monsanto, and are eager to continue to accelerate innovation in agriculture as we look forward to a future under Bayer.”
A spokesperson for St. Louis-based Monsanto said in an email: “There will be no branding changes today. Monsanto will operate independently from Bayer for an interim period while Bayer completes the sale of some of its businesses to BASF. During this time, it will be business as usual for us, including our company name.”
A key condition of U.S. Department of Justice approval of the Bayer-Monsanto deal was the German pharmaceutical and pesticide giant divesting some of its crop science assets. The divestitures of those businesses is expected to take approximately two months to close.
“Bayer will remain the company name,” the German company said this week. “Monsanto will no longer be a company name. The acquired products will retain their brand names and become part of the Bayer portfolio.”
Monsanto’s key brands include Roundup, DeKalb, Acceleron, Asgrow, Seminis and Deltapine. Its Roundup product — introduced in the 1970s — is the world’s top-selling herbicide.
“The speed at which they’re looking to do away with the Monsanto brand speaks volumes in that traditionally you have a slow burn in many cases,” said Aaron Perlut, managing partner of Elasticity, a St. Louis-based consulting firm specializing in brand reputation management. He said big mergers typically have a transition period of a year or two before there are major changes of this scale.
“It seems like this is much more hastened than normally we would see, particularly at this scale of an acquisition,” Perlut said.
Last week, Bayer trimmed its synergy target for Monsanto from $1.5 billion to $1.2 billion but said it still expects the American company to generate a positive contribution to core EPS starting next year. Monsanto employs more than 22,000 people worldwide.
Monsanto’s agricultural biotechnology research and development operations that are going to Bayer are the largest in the world and include making genetically modified seeds for such crops as corn, soybeans and cotton. Corn represented almost 60 percent of Monsanto’s total seed and genomics business last year.
“The entire business is essentially going over to Bayer intact,” said Morningstar analyst Seth Goldstein. “Taking away the Monsanto name is more of a branding. It should allow for easier PR for Bayer.”