Germans Started Buying American Companies

Economy Jamie Simon
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Taking over the 66 billion US industries giant Monsanto by Bayer agrochemical would make total purchases made this year by German companies abroad of 115 billion dollars. The Germans main target so far has been US players, writes The Wall Street Journal.

The maneuver made by Bayer is the latest example of how large companies in Germany are oriented towards foreign markets while the German market growth prospects are modest. 2016 could prove to be a record year for foreign purchases of German companies.

Germany’s strong economy and favorable financing conditions have encouraged expansion. The American market is an older target for the German companies. Siemens bought two years ago the oil services company Dresser-Rand Group for 7.7 billion dollars to build a leadership position in the US hydraulic fracturing. In the same year, auto parts manufacturer by ZF Friedrichshafen has bought rival TRW Automotive Holdings for $ 13.4 billion.

In the pharmaceutical sector, Merck acquired all two years ago Sigma-Aldrich for $ 17 billion, considering that it was too weak a position in the US.

The German group Bayer said on Wednesday that the US seed producer Monsanto agreed the takeover offer of 128 dollars per title, representing a total transaction value of 66 billion dollars, the largest action of mergers and acquisitions this year.

According to sources quoted earlier by Reuters, after four months of negotiations, the decisive moment came last week when Bayer has improved again bid up to $ 127.50 in cash for each Monsanto share.

The new offer evaluates Monsanto to 66 billion, excluding debt, however, it is below the price of 130 dollars per share, which the US company hopes to achieve.