Is a 'merger of equals' possible?
Potash is the global leader in fertiliser production...
Potash Corp. and Agrium Inc. have merged to create a crop nutrient behemoth worth $27 billion.
Potash is the global leader in fertiliser production, and Agrium is a retailer of agricultural products. The former will benefit from Agrium’s steady sales, while the latter earns a boost to its inventory of potash and fertiliser.
John Colley, a Professor of Practice in the Strategy & International Business Group, researches large takeovers, and has commented on this merger:
"Low crop prices and over-capacity in the fertiliser industry are forcing industry consolidation with Potash Corporation merging with Agrium in a $30 billion 'merger of equals'.
"The combined company will control almost two thirds of North America's potash market, 30 percent of the phosphate capacity and 29 percent of nitrogen capacity according to National Bank Finance.
"The US Department of Justice may well have plenty to say on this merger as with regional variations market shares are likely to be much higher in some areas. While substantial cost rationalisation is possible through Head Office and regional structure duplication, no doubt production capacity will also be rationalised which reduces costs and helps selling prices. Farmers will be faced with more limited product ranges and less supplier choice. Expect higher prices to be introduced as well as lower industry costs.
"Provided the board can sort out who is in charge following the 'merger of equals' then this should be good news for shareholders. Many previous 'mergers of equals' have come to grief through internal bickering and indecision.
"The Daimler Chrysler $36 billion merger is one example and Lafarge Holcim's €71 billion merger in cement is another. Agrium CEO Chuck Magro will be CEO of the combined group, while Potash CEO Jochen Tiik will become Executive Chairman. No doubt it will be some time before it is clear who will prevail.
"As for the farmers they are likely to be faced with less choice and higher prices in crop nutrition, seeds, pesticides and herbicides with the other mergers of Du Pont with Dow Chemicals in a $130 billion deal and potentially Bayer and Monsanto in a likely $65 billion deal. They will be looking to the Department of Justice for protection in the US."
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Sustainable Manufacturing: Bayer Joins Manufacture 2030
“Advancing life - that's what we at Bayer are all about.” With this strong mission statement at the core of its operations, it seems fitting that the pharmaceutical and life science company has joined Manufacture 2030 to further promote inclusive growth and responsible use of resources.
For Bayer, the concept of means “providing more people across the world with access to health care and food security, and devising solutions to protect the environment, especially decarbonisation, climate adaptation, and biodiversity preservation.”
Bayer’s Ambitious Series of Sustainability Commitments
In line with the United Nations Sustainable Development Goals and the Paris Agreement, Bayer’s ambitious sustainability targets to achieve by 2030 include:
- To reduce its Scope 1 and 2 greenhouse gas (GHG) emissions by 42%, and absolute Scope 3 GHG emissions by 12%
- By 2030 the remaining emissions of Bayer’s operations will be fully offset by purchasing certificates from verified climate protection projects
“Given CO2 emissions are the main reason for climate change, Bayer is committed to making our business as resource efficient as possible, aiming to become carbon-neutral across our own operations by 2030. By partnering with Manufacture 2030 and their cloud-based platform, the Bee, we can better equip our operational teams with the know-how needed to reduce impacts, as well as track our site-level performance towards company targets. We are confident that by embedding innovative technologies like the Bee, we can play our part in protecting the climate,” said Thomas Gosmann, Head of Pharma Technology & Global Energy Manager at Bayer.
Bayer’s Five Year Partnership with Manufacture 2030
Over the next five years, Manufacture 2030 aims to help Bayer meet its targets, reducing SCope 1 and 2 emissions across Bayer’s 138 sites, and covering all three business units (pharmaceuticals, consumer health and crop science).
“We are delighted to be launching this new partnership with Bayer, helping them to achieve their Science Based Targets by reducing site-level environmental impacts. Helping people and the planet is at the heart of Bayer’s philosophy, as well as being an organisation full of expertise, so we are thrilled they have chosen our unique platform to aid them in continually improving the environmental sustainability of their business,” added Martin Chilcott, Founder and CEO at Manufacture 2030.
About Manufacture 2030
Manufacture 2030 - Founded in 2017 - is a trading brand of mission-driven private company . Manufacture 2030 pioneers new ways to drive sustainable proactive across the manufacturing and supply chain world by partnering with multiple brands and their suppliers to reduce environmental impacts.
Headquartered in the UK, the company’s platform and support services help suppliers and manufacturers in 50 countries around the world.
“We are a culturally diverse and energetic team, passionately committed to helping our clients and their suppliers achieve their carbon reduction commitments,” says Manufacture 2030.