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Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
Speaker 1: I'm Charlie peltonal the SMP NESDAK all declining right now.
Speaker 1: Let's head over to the First Word Breaking news desk
Speaker 1: for today's afternoon call. And here's Bill Maloney. Good afternoon, Charlie.
Speaker 1: Stocks are under pressure today, with the Dow currently lower
Speaker 1: by a hundred and twenty point says if he's dropped
Speaker 1: seven and as that lower by two and a half.
Speaker 1: This morning, the Dallas Fetti manufacturing was a big miss,
Speaker 1: and a UK online poll on the EU showed forty
Speaker 1: seven percent leave remained. The small cap six hundreds down
Speaker 1: to point and the US ten y yield fell to
Speaker 1: one point eight three percent after hitting one point eight
Speaker 1: nine percent, and crew features faded from the fifty dollar level.
Speaker 1: Eight out of tennis B sectors are lower, led by
Speaker 1: losses and staples, energy and the materials. Only Telecom and
Speaker 1: utilities gained doubt Transports rise three points and as a
Speaker 1: biotext climb seven, and the vix is higher by thirteen percent.
Speaker 1: Dell leaders of the downside include Boeing DuPont and Nike,
Speaker 1: small games for Verizon and Caterpillar. Amazon traded to a
Speaker 1: new all time intur day high, hitting seven hundred and
Speaker 1: twenty four hours to share. Apple traded back below the
Speaker 1: hundred dollar level, and Great Plains Energy fell six percent
Speaker 1: after its deal for west Star after the belt tonight,
Speaker 1: look for earnings from work Day Live on the first
Speaker 1: Breaking News desk on Bow Maloney. Charlie all right, thank
Speaker 1: you very much, Bill Maloney, and we are brought to
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Speaker 1: You're listening to taking stock with pin Box and Kathleen
Speaker 1: has on Bloomberg Radio. Monsanto may have initially rejected buyers
Speaker 1: sixty two billion dollar takeover bid. Bloomberg First Word reporting
Speaker 1: that Street Insiders says they are ready to raise their
Speaker 1: bid to a dollar thirty five or excuse me, a
Speaker 1: hundred hundred thirty five share. Excuse me, got my decimal
Speaker 1: point in the wrong place. That's where the focus has
Speaker 1: been a lot on on when it comes to Wall
Speaker 1: Street in analysts. But our next guest is looking at
Speaker 1: a very important part of this, and that's the rigorous
Speaker 1: review by anti trust regulators that buyer will face in
Speaker 1: multiple jurisdictions around the world. What does this mean for
Speaker 1: the deal? Jennifer Jennifer rehe Is. Here's he's senior litigation
Speaker 1: analysts for Bloomberg Intelligence and she's joining us in our
Speaker 1: New York studio. Welcome, Jennifer, Thank you so much for
Speaker 1: having me. So again, let's put all that price stuff,
Speaker 1: because if they really want to do this, they're going
Speaker 1: to come to a price, right. The question is that's
Speaker 1: just one step then have to get past the regulatars.
Speaker 1: What's the biggest issue on that those regulators minds? You know,
Speaker 1: I think the biggest issue is that we're looking at
Speaker 1: a lot of concentration in what you might want to call,
Speaker 1: you know, agricultural or chemical areas, so you know, three
Speaker 1: different deals that are ongoing at the same time that
Speaker 1: are all global in nature, that deal with various crop
Speaker 1: protection chemicals and with seeds, and there's a lot of
Speaker 1: nervousness about the way the regulators are going to view
Speaker 1: these deals, given what they've done with Haliburton and Baker
Speaker 1: Hughes and a few other deals in the past. Um
Speaker 1: and whether this might be deemed too much concentration. Now
Speaker 1: here's a quote, and I'd like your thoughts and maybe
Speaker 1: you can figure out exactly what this would mean for
Speaker 1: people that are involved in the legal issues of this
Speaker 1: potential combination. This is coming from Robert Lawrence. He's a
Speaker 1: Johns Hopkins School of Medicine professors, also the founding director
Speaker 1: of the Center for a Livable Future. He says, the
Speaker 1: fact is we went from having probably thirty to forty
Speaker 1: varieties of soybeans to now having one variety making up
Speaker 1: nearly all of US soybean production. So as set aside
Speaker 1: the business aspect of what this means for farmers, but
Speaker 1: just in terms of having to only rely on one variety, well,
Speaker 1: you know the fact that that might have happened, you know,
Speaker 1: we have to understand why that happened and how that
Speaker 1: came about. If that happened due to increased concentration and
Speaker 1: less competition. It's one thing, but the anti trust laws
Speaker 1: will focus on increased competion, competition, but a decrease in competition,
Speaker 1: less innovation, and less choice from mergers. So they'll look
Speaker 1: at the effect of these deals and whether these deals
Speaker 1: may continue to contribute to that. They may not look at,
Speaker 1: you know, they'll look the way things stand today, but
Speaker 1: they look at will it for will they further contribute
Speaker 1: and if in fact it will, is there something can
Speaker 1: that can be done? Are there concessions or divestitures or
Speaker 1: let's say, changes the licenses that can be agreed to
Speaker 1: in order to allow these deals to go forward and
Speaker 1: perhaps fix that problem going forward? So is it give
Speaker 1: us just a sense of do there are the issues
Speaker 1: pretty much the same among antitrust regulators around the world.
Speaker 1: If you go from the US to Germany to gosh,
Speaker 1: you know, Japan, is it different? It is different? You know,
Speaker 1: there are many many similarities, but there are also differences.
Speaker 1: And to start with in this industry, what we've seen
Speaker 1: so far historically is that these regulators will look at
Speaker 1: the effect on in this area country by country and
Speaker 1: not necessarily globally. So, for instance, if the European regulators
Speaker 1: are looking at how it affects competition European Union wide
Speaker 1: or country by country within Europe, that's going to be
Speaker 1: different than the way the U S regulators may look
Speaker 1: at it, who are focusing on how does it affect
Speaker 1: the United States UH and China, which might be asking
Speaker 1: how does this affect China. There are times when the
Speaker 1: regulators will say, this is a global market, how does
Speaker 1: it affect the world the globally? But in this area,
Speaker 1: at least in the past, historically they have looked at
Speaker 1: the areas when they've assessed past deals country by country. Well,
Speaker 1: just to just to sort of underscore your point about
Speaker 1: this consolidation, we're talking about Dow Chemical and DuPont combining,
Speaker 1: then c Genta, and then you've got the Chinese state
Speaker 1: owned company KEM China KIM China, right, So a real
Speaker 1: concentration in this particular industry group. Right. But again, the regulators,
Speaker 1: the first thing they ask is where do these companies
Speaker 1: compete in terms of products and services? And where do
Speaker 1: they compete geographically? And that's the starting point and you
Speaker 1: have to ask that. And when you ask that, and
Speaker 1: you start to look at these deals, you realize, okay, well,
Speaker 1: KEM China and cin Ginda don't necessarily overlap in every
Speaker 1: country in the US, and for every product, they don't
Speaker 1: necessarily compete everywhere. And the same thing could be true.
Speaker 1: Let's say for seeds. You know you have buyer that
Speaker 1: isn't so big in seeds and bigger and crop protection
Speaker 1: and and and more complementary perhaps to mind Santo, and
Speaker 1: you've got to kind of dig into that nitty gritty
Speaker 1: to understand where the competition issues are going to lie.
Speaker 1: I would imagine they're also going to have to learn
Speaker 1: about the diseases that might affect No, seriously, that might
Speaker 1: affect some of these crops, because if you're only depending
Speaker 1: on one variety, then it doesn't matter what if did
Speaker 1: the business. It will devastate the agricultural community. Absolutely. You know,
Speaker 1: they dig in hard, these regulators. That's why these things
Speaker 1: taken here. They look at everything. Yes, or notice, let's
Speaker 1: go through the steel. Do they make it past just
Speaker 1: I think yes, with with some concessions. I'm thank you
Speaker 1: very much for coming in and spending time with us.
Speaker 1: Jennifer Rees, senior litigation analysts for Bloomberg Intelligence. Shares of
Speaker 1: Monsanto they are up about two and a half percent
Speaker 1: right now, and shares of Buyer down about one percent.
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