$3$ points

Bayer AG BAYRY $-0\mathrm{.}26\%$ fought hard to take over Monsanto Co$.$ Today, the $$63$ billion gambit ranks as one of the worst corporate deals in recent memory$-$ar is threatening the $156-$year$-$old company's future.

Ten days after Werner Baumann became chief executive of Bayer in May $2016,$ he made a bid for Monsanto that was designed to turn the inventor of aspirin into the world's biggest crop$-$science business. The U$.$S$.$ company, he calculated, would turn Bayer's smaller agrochemicals business into a market leader by combining its pesticides with Monsanto's seeds and high$-$tech crops. It would also save Bayer $$1\mathrm{.}2$ billion a year in costs, help it develop new products more quickly and generate cash. The world's rapidly increasing population would assure growing sales, as per capita farmland shrinks and farmers seek to raise productivity.

Within weeks of the acquisition closing in June $2018,$ Bayer lost a lawsuit alleging Monsanto's Roundup herbicide causes cancer. The court ordered Monsanto pay $$289\mathrm{.}2$ million in damages on Aug. $10,2018.$ The size of the award, later reduced to $$78\mathrm{.}5$ million, spooked markets and dismayed Bayer directors, accordi to people close to the top executives. A sharp rise in the number of new plaintiffs further clouded the outlook. With three verdicts issued against Bayer so far, analysts' estimates of its total Roundup liability vary between $$5\mathrm{.}5$ billion and $$27\mathrm{.}7$ billion. Mr$.$ Baumann said the plan was independent of the Roundup legal woes.

The share price continued to fall. Bayer's market capitalization is now close to whatehe company paid for Monsanto alone, meaning the value of one entire company has almost entirely evaporated. Shares are currently down around $50\%$ from their high of April $2015,$ when Bayer was the most valuable German company. $($Adapted from Bender, $2019)$

According to the passage, which of the following problem is the main reason for the failure of the Bayer$-$Monsanto deal?

too much diversification

inadequate evaluation of target

inability to achieve synergy

integration difficulties