Germany-based life sciences company Bayer acquired US-based agrochemical producer Monsanto last week for a total consideration of $63bn and is now debating what to do with the latter’s corporate venture capital unit, according to Agfunder.
The success of Monsanto Growth Ventures (MGV) has been lauded by Liam Condon, chief executive of Bayer CropScience, a seed and food security subsidiary of Bayer, but he refused to commit his company to maintaining the unit.
Bayer has traditionally favoured larger investments through its Leap program, establishing joint ventures such as the $100m Joyn Bio with biotech developer Ginkgo Bioworks.
The decision is complicated by the legal terms of Bayer’s merger with Monsanto, which stipulate that for the next 10 year the corporate must inform the US Department of Justice 30 days in advance of any investment it intends to make in a digital agriculture company or vendor of soybean, cotton, canola, corn seeds or traits.
The same terms apply to acquisitions. During the 30-day period, the government may demand additional information, potentially delaying any deals and forcing MGV to forego follow-on rounds where timing can be restricted.
Condon noted that Bayer is not particularly worried that the terms apply to internal venture activity and pointed to the fact that investments in other sector do not come with such restrictions.
He said: “We are very excited about what we see and what we know of Monsanto Growth Ventures. We think it is a great model. We think it is a model that is uniquely adapted to the need of venture capital in ag, which is a bit different than in other life science areas.
“We believe that the Monsanto Growth Ventures approach is highly complementary to what we were doing, so we would be very excited to continue with that approach in the new company.”