Confermo di essere un cliente professionale
Le informazioni e le opinioni contenute in questa sezione del Sito cui sta accedendo sono destinate esclusivamente a Clienti Professionali come definiti dal Regolamento Consob n. 16190 del 29 ottobre 2007 (articolo 26 e Allegato 3) e dalla Direttiva CE n. 2004/39 (Allegato II), e sono concepite ad uso esclusivo di tali categorie di soggetti. Ne è vietata la divulgazione, anche solo parziale.
Al fine di accedere a tale sezione riservata, si prega di confermare di essere un Cliente Professionale, declinando Robeco qualsivoglia responsabilità in caso di accesso effettuato da una persona che non sia un cliente professionale.
In ogni caso, le informazioni e le opinioni ivi contenute non costituiscono un'offerta o una sollecitazione all'investimento e non costituiscono una raccomandazione o consiglio, anche di carattere fiscale, o un'offerta, finalizzate all'investimento, e non devono in alcun caso essere interpretate come tali.
Prima di ogni investimento, per una descrizione dettagliata delle caratteristiche, dei rischi e degli oneri connessi, si raccomanda di esaminare il Prospetto, i KIIDs delle classi autorizzate per la commercializzazione in Italia, la relazione annuale o semestrale e lo Statuto, disponibili sul presente Sito o presso i collocatori.
L’investimento in prodotti finanziari è soggetto a fluttuazioni, con conseguente variazione al rialzo o al ribasso dei prezzi, ed è possibile che non si riesca a recuperare l'importo originariamente investito.
It's no coincidence that the two biggest acquisitions so far this year are in the seed and crop protection segments. Feeding the planet is the powerful, underlying driving force behind a series of mergers and acquisitions in agrotechnology and argrochemistry.
“A wave of acquisitions starting in 2014 culminated in the recent USD 66 billion (EUR 59 billion) acquisition of US seed supplier Monsanto by German chemical corporation Bayer,” says analyst Vera Krückel. “That year, Monsanto displayed interest in Syngenta for the first time – the cue for fellow seed companies to start pursuing acquisitions themselves.”
Syngenta rejected several of Monsanto's bids, and was concerned about problems with competition authorities. In February of this year, however, the Swiss pesticide manufacturer was taken over for USD 43 billion (EUR 39.4 billion) by the Chinese state-owned chemical company ChemChina. While Monsanto and ChemChina vied to take over Syngenta, two other large seed and crop protectant producers announced a mega-merger. Chemical giants Dow Chemical and DuPont indicated last year that they want to continue together with a merger worth USD 130 billion (EUR 120 billion).
Meanwhile, in May, Bayer expressed its interest in Monsanto, which, in turn, had begun eying the seed division of German chemistry giant BASF after the Syngenta takeover had failed. Bayer then raised its bid several times until Monsanto capitulated. Pending approval of the competition authorities, the proposed acquisition will result in the establishment of the world's largest producer of seeds and crop protection agents.
These mergers and acquisitions vary from a business economics point of view. Krückel: “Sometimes the activities are complementary, as is the case with Bayer's crop protectants and Monsanto's seeds. At the conglomerates DuPont and DowChemical, activities are becoming more focused, by combining them in the chemical resources, specialty chemicals and agritech divisions, for instance.”
“The low prices of agricultural raw materials also play a role. They reduce farmers’ earnings and discourage investments in larger-scale production. That's why seed and pesticide producers try to increase the scale of their activities through mergers and acquisitions and maintain their revenues and profits at the same level. Historically, the seed and crop protectant sectors have always been two separate worlds with different suppliers. Now, producers want to offer farmers all-in-one packages and convince them their seeds will only benefit from their brand of pesticide in order to trap them in an ecosystem.”
Those companies don't want to give up their seed and crop protectant divisions. “That's because the margins are stable”, says Krückel. “In addition, their collaboration means less and less competition in a market where there are already high barriers to entry for new players. Research and development requires significant levels of investment and obtaining approval for products is a time consuming process. Both of these factors are significant obtacles.”
‘Consolidation in agrotech and agrochemistry is good for profits, but not for innovation’
The need to safeguard food production places ChemChina's acquisition of Syngenta in somewhat different light. China's population is growing. This, combined with the fact that more and more arable land is being used for construction, has forced China to become a net importer of grain and meat. “Achieving higher yields with less available farmland is a high priority for China. With Syngenta, they have acquired that expertise”, says Krückel.
China is not the only country where the population is disproportionate to the available farmland. A graph published by the United Nations Food and Agriculture Organization (FAO) is telling. Over the last 55 years, the world population has undergone a sharp increase, growing from 2.5 to 7 billion. However, in the same period, the arable land available worldwide has remained nearly the same at 4.8 billion hectares. According to the FAO, the world population will increase by an estimated 35% over the next 35 years. During that time, arable land will increase by a meager 4%. That means less arable land per capita, necessitating a greater yield per hectare in order to keep everyone fed.
Over the last 40 years, a lot of progress has been made on increasing harvests, thanks to seed processing and biotechnological improvements. Krückel says that precision farming should now raise the levels even higher. “With precision farming, the fields are meticulously analyzed and evaluated. Weather statistics are also considered. These data are then used to accurately determine what should be sowed, and where fertilizer is needed, irrigation is required and pesticides should be used. Agriculture is turning into a high-tech business. Monsanto is actively pursuing digital agriculture and has applications that help farmers increase yields with data and algorithms.”
Now that the agrotechnology and agrochemistry sector are increasingly consolidating, competition authorities and regulators will take a critical look at the Bayer-Monsanto deal. After all, the basis of our food supply will be in the hands of only a few companies.
There's one other reason Krückel worries about consolidation. “In terms of profitability, consolidation is is good, but too little competition hurts innovation. Innovation is required in order to bridge the gap between the demand for food and the limited availability of farmland.”