Taking the new ideas in alphabetical order, Bayer (XTER:BAYN) is a German-based company with sizable global businesses in pharmaceuticals, agricultural productivity and consumer health products. Bayer’s standalone businesses are high quality and the group will become even stronger if the acquisition of Monsanto is approved. Combining Bayer’s agricultural productivity business with Monsanto’s capabilities would create the world’s leading agricultural productivity business and offer significant synergy potential. It should position Bayer to benefit from the structural demand for increased agricultural productivity, given flat growth in arable land and the growing demand for food. Bayer’s management team remained disciplined during the price negotiations and divested certain assets at good prices to create room for the purchase in the company’s balance sheet. Regardless of whether the Monsanto acquisition is approved, though, we believe that Bayer’s valuation will remain attractive.
From Bill Nygren (Trades, Portfolio)'s first quarter 2018 Oakmark Global Fund commentary.
