Bayer / Monsanto Deal gets Clearance

Market Roundup

European Markets closed mixed on Wednesday as investors focused on the political crisis in Italy which could lead to a new parliamentary election in the country. President Sergio Mattarella appointed Carlo Cottarelli as the head of an interim government after anti-establishment candidate Giuseppe Conte failed to form a government as a result of Mattarella blocking his economy minister pick. However, Cottarelli still hasn't presented the president with a list of ministers and anti-establishment party Northern League called for new elections "as soon as possible."

Italy's FTSE MIB recovered from losses suffered earlier in the week and ended the session over 1% in the green. Financials recorded strong performances with Mediobanca and Finecobank rocketing 7.06% and 6.44%, respectively.

In the UK, the FTSE 100 climbed 0.75% and Germany's DAX jumped 0.93%. Merck and Bayer led the gains as they surged 3.94% and 3.91%, respectively. Bayer's performance was boosted by news the company agreed to sell $9 billion worth of agricultural assets in order to secure the US Department of Justice's approval of its acquisition of Monsanto. Meanwhile, France's CAC 40 declined 0.53%.

On the other side of the globe, US markets had a positive opening despite fresh trade war concerns sparked by Washington's announcement that it will reveal by June 15 the final list of $50 billion worth of Chinese imports that will be targeted by a 25% tariff.

Furthermore, France warned the US that the European Union will "defend its interests" in case it is not permanently exempted from the metal tariffs and US Commerce Secretary Wilbur Ross slammed the bloc for refusing to enter trade talks with the US in case it is targeted with import duties. On the data front, investors digested preliminary GDP data, as well as private payroll and wholesale inventories figures.

Bayer and Monsanto

The United States Justice Department announced that it told German pharmaceutical giant Bayer AG that it will approve its acquisition of Monsanto in case it sells its agricultural assets worth $9 billion. Bayer agreed to the conditions which mark the largest ever antitrust divestiture in the US.

The announcement confirms media reports from April which stated the DoJ told the two companies it will greenlight the transaction on the condition they sell off additional assets.

In 2016, Monsanto accepted the German drug maker’s $66 billion takeover bid and the deal was approved by the European Commission and Russia earlier this year.