Bayer Will Keep Monsanto Jobs in U.S., Trump Team Says -- Update
18 January 2017 - 06:25AM
Dow Jones News
By Christopher Alessi in Frankfurt and Jacob Bunge in Chicago
Bayer AG will maintain Monsanto Co.'s entire U.S. workforce
after the German chemicals giant's planned $57 billion acquisition
of the U.S. agrochemical group, a spokesman for President-elect
Donald Trump said Tuesday.
According to Trump transition team spokesman Sean Spicer, Bayer
Chief Executive Werner Baumann pledged in a recent meeting with Mr.
Trump to keep 100% of Monsanto's more than 9,000 U.S. jobs in the
country and to create at least 3,000 new U.S. high-tech jobs. Mr.
Baumann also committed to spending $8 billion on new research and
development plans, Mr. Spicer said on a call with reporters.
"The reason for this commitment and expansion is because of the
president-elect's focus on creating a better business climate here
in the United States," Mr. Spicer added, noting that Monsanto's
headquarters would remain in St. Louis.
In a joint statement that followed the Trump team's remarks,
Bayer and Monsanto said the merger would create "several thousand"
new high-tech positions in the U.S., but they declined to comment
on concrete job numbers.
Bayer's pledge makes it the latest major company to make
commitments on U.S. jobs, investment or operations following Mr.
Trump's November election after a campaign that emphasized job
creation and domestic business expansion. Mr. Trump vowed to bring
back manufacturing positions to the U.S., and since his election
has castigated companies for shifting operations abroad while
praising others for domestic expansion plans.
General Motors Co. on Tuesday confirmed a plan to invest a
further $1 billion in its U.S. manufacturing operations, while
Hyundai Motor Co. outlined a new $3.1 billion investment in U.S.
manufacturing plants. Also on Tuesday, Wal-Mart Stores Inc. touted
its plans to add about 10,000 U.S. jobs this year. Last week,
Amazon.com Inc. outlined plans for an additional 100,000 full-time
U.S. jobs.
Bayer's Mr. Baumann and Monsanto Chief Executive Hugh Grant met
with the president-elect last week in New York to make the case for
Bayer's planned takeover of the U.S. seed maker amid concerns over
whether such a deal could hurt U.S. jobs and competitiveness. Some
farmers and state agricultural officials on Mr. Trump's
agricultural advisory committee, created last year to advise Mr.
Trump's campaign on farm policy matters, have called on Mr. Trump
to block tie-ups between some of the agricultural industry's
biggest players, over concerns that competition will slacken and
prices for seeds and crop sprays will rise.
While Bayer has said that buying Monsanto isn't based on cutting
costs from the combined businesses, the German company in September
targeted about $1.5 billion in cost savings from the deal. On a
September conference call with employees, Mr. Baumann acknowledged
that some layoffs could be inevitable due to overlapping jobs.
The companies also said Tuesday that they expect to spend
roughly $16 billion for R&D in agriculture over the next six
years, with at least half of that investment in the U.S. That works
out to a total of about $2.7 billion a year. Monsanto spent
slightly more than $1.5 billion on research and development efforts
in each of the past two years, while Bayer spent about $1 billion
in agricultural R&D in 2014 and $1.17 billion in 2015.
The German firm and Monsanto agreed to create an agricultural
powerhouse in September, ending the independence of one of the
U.S.'s most successful and controversial corporations.
"The United States is a global leader in agriculture, and the
combination of Bayer-Monsanto will underscore that role and ensure
the United States retains a pre-eminent position as the anchor of
the industry," the companies said in the statement.
Bayer plans to fuse its prowess in pesticides -- it ranks among
the world's largest suppliers -- with Monsanto's capabilities in
seed genetics and biotechnology, which have allowed it to develop
corn, soybeans, cotton and other crops that can survive
weed-killing sprays and make natural toxins to repel bugs. The
merged company would be the world's No. 1 supplier by sales of both
seeds and pesticides.
The deal, the latest in a wave of consolidation in the industry,
still faces regulatory hurdles in the U.S. and Europe. It would
shift Bayer's business focus away from its lucrative
pharmaceuticals division and focus it more squarely on
agriculture.
--Damian Paletta contributed to this article.
Write to Christopher Alessi at christopher.alessi@wsj.com and
Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
January 17, 2017 14:10 ET (19:10 GMT)
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