Bayer's Acquisition of Monsanto: A Critical Evaluation of Bayer's Financial Communication During the Crisis in the Post-acquisition Phase

Nicolai Braun

Student thesis: Master thesis

Abstract

Within a company, the department of investor relations covers the task of financial communication. Effective financial communication bridges the gap between the company’s top management and investment decisions makers. Financial communication is concerned with more than financial figures and data, especially because the usage of language plays a key role in building an organization’s image, reputation, credibility and confidence. In the course of Bayer’s acquisition of Monsanto in June 2018, deficiencies in the usage of financial communication became evident. In fact, from August 2018 onwards the company’s stock price has suffered a steady decline. This is mainly due to thousands of law suit claims arising in connection with Monsanto’s best-selling product Roundup and its controversial component glyphosate. Bayer’s statements related to these legal cases showed little effects to turn the negative trend of stock price erosion around. Bayer executives and board members who were responsible for the acquisition might be accused to have underestimated the legal and reputational risks the acquisition would bear on image, reputation and investor’s trust. Not to mention whether the single-minded focus on business synergy effects and potential cost savings was a huge mistake that left out a more holistic view of all related risks in the context of the acquisition. However, during the annual general shareholder meeting in April 2019, no self-doubt could be identified at top-management level. That shows the striking dilemma of inappropriate financial communication. Critical Discourse Analysis of the CEO’s speech brings further light into the issue, why Bayer has not managed to improve investors’ trust and escape the crisis through its financial communication. Bayer’s top management should better analyse how to set a new business strategy and communicate more credibly that it is serious about Roundup’s hazards and liability compensation payments, as well as developing glyphosate alternatives in order to restore the trust of a broad public and of all stakeholders.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2019
Number of pages110