German chemical giant Bayer AG is promising President-elect Donald Trump billions of dollars in research and development spending in the U.S., as well as what it is saying will be a significant commitment to create jobs, if its planned merger with Monsanto Co. (MON) receives the necessary regulatory approvals to proceed, a Trump transition team spokesman confirmed on Tuesday.
The news was first reported earlier Tuesday by the FOX Business Network.
“After [Trump’s] meeting with Bayer and Monsanto CEOs, Bayer has committed to $8 billion in new U.S. research and development. Bayer will also keep 100% of Monsanto’s 9,000 plus U.S. workforce, and add 3,000 new U.S. high-tech jobs,” incoming White House Press Secretary Sean Spicer said during a press conference call.
Separately, the companies promised to spend $16 billion for research and development in agriculture over the next six years with half of those funds dedicated to the U.S. “This is an investment in innovation and people that will create several thousand new high-tech, well-paying jobs after integration is complete, jobs that will keep America at the forefront of agricultural innovation and that serve U.S. farmers by delivering better products and services faster” according to a joint statement released by Bayer’s CEO Werner Baumann and Monsanto chief Hugh Grant.
The initial commitment was made by the CEOs after days of negotiations with the President-elect and his senior transition staff, according to people with knowledge of the matter. Monsanto shares rose on the news as the broader market declined.
Last Wednesday the pair of CEOs met with the incoming President at New York’s Trump Tower, where both executives discussed some of the benefits of the deal, which will need U.S. and European Union regulatory approval to proceed, these people say.
The exact nature of the commitment could not be immediately determined, but people with knowledge of the negotiations say company executives are pitching it as significant. Bayer is willing to create a multi-billion dollar spending package in the U.S., mostly focused on research and development, and produce jobs that one analyst says over time could meet or exceed the 800 jobs that Carrier Corp., agreed to keep in the U.S. after negotiations with the President-elect weeks ago.
There will be a key difference in the Bayer negotiations with Trump officials: the Carrier jobs came after the company received significant tax incentives provided by the state of Indiana, the site of its air-conditioning manufacturing plant that was looking to outsource jobs to Mexico. The jobs that Bayer is promising to create are expected to be new jobs, without such incentives.
Since the $66 billion deal was announced last summer, investors have been skeptical it would receive the necessary approvals from the EU and the U.S. Justice Department’s Antitrust Division when the Trump administration takes control of the White House after Friday’s inauguration.
The New York Post recently reported that a similar deal between Dow Chemical and DuPont might get nixed because of anti-trust concerns both in the U.S. and abroad.