Skip to main content

Monsanto is dead. Now what?

It seems Monsanto is finally out of its misery. What was once arguably the most detested company in the world will likely cease to exist with its acquisition by Bayer.

Monsanto’s attempt to acquire Swiss-based Syngenta last year not only failed, but also was rejected with extreme prejudice. But now, with Bayer’s acquisition of St. Louis-based Monsanto, the latter (or at least its brand) will slowly disappear into the sunset.

Many suspect that it was Monsanto’s intended objective to kill its own brand and leave the environmentalists looking for a new foe. After many years, it came to the realization that it had to become someone else’s prey, rather than the hunter.

We have seen several acquisitions in the agrifood sector in recent months, but this one is different. Germany’s Bayer AG and Monsanto Co. announced the acquisition at nearly US$130 a share, more than $65-billion in total, creating an agricultural behemoth.

Combining both companies makes it the market leader on the three largest continents: North America, Europe and Asia. Both companies are of significant size and both generate revenue from different streams. The deal comes after months of discussions between the two companies.

From a business perspective, the acquisition makes sense. New markets can be developed for Monsanto’s current products while Bayer gains access to considerable intellectual property in crop science and seeds.

This acquisition gives Bayer a comprehensive portfolio of chemicals and products to help farmers increase yields. Bayer’s brands will likely dominate the portfolio of products as it is hard to see how the Monsanto brand will survive over the long term.

Obviously, there are some risks with this acquisition, but many argue that the Bayer-Monsanto marriage has a better chance of succeeding than last year’s attempt to acquire Syngenta. Then, it was North America buying a company in GMO-hating Europe, which would have likely been politically impossible to get through regulators. Now, it’s now the other way around.

A backdrop to all of this was the ever-increasing public outcry against Monsanto’s agricultural tactics. For many years, its leaders thought their science-based approach was good enough to help validate what they were trying to achieve. They failed to properly engage with the public, until it was much too late.

For years, “Marches Against Monsanto” across almost 35 countries and over 410 cities served as evidence that the company’s risk communication scheme had failed miserably. Gatherings around the world aimed to raise awareness about genetically modified seeds, labelling and potential health risks caused by the use of unwanted herbicides.

With the help of social media, opposition only gained steam. Since July 1, the state of Vermont has made GMO labelling mandatory, while other states are now considering to do the same. This is the legacy of the company pretending that the collective rejection of its model was not real. It was in denial for a very long time.

Given the compelling science behind genetically modified crops, suggesting they were safe, these movements were less about GMOs than about Monsanto itself.

In the past, the company felt so confident about its science-based approach in a science-dominated corporate culture that societal optics were never really seriously considered. After all, Monsanto hires thousands of PhDs and researchers, and science was king.

The company thought that by having science on its side, there was no need to tackle concerns originating from what it considered flawed studies. Yet adversaries of Monsanto’s business model have successfully exploited the fact that trust, the golden rule in risk communications, actually has more currency than science.

The extent and amplitude of public criticism caused Monsanto to recognize too late that it had lost control over public perceptions. By this point, gaining social licence was impossible. The company had inadvertently polarized the issue of genetically modified crops to its own detriment.

Accepting Bayer’s offer makes a case for the company’s recognition that it had completely misread the market and was unable to salvage its position.

Monsanto’s end will be met with delight from many environmentalists. But now it’s time for a rational conversation about biotechnologies. Science deserves its place, of course, but consumers must remain part of that conversation moving forward.

More Blog Posts in This Series

This ad will auto-close in 10 seconds