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I read this article about Bayer buying Monsanto.

The question which came to my mind was: Who receives the money? If Monsanto receives the money, and Monsanto becomes part of Bayer, then doesn't Bayer still have the money? Or does another party like a holding company get the money?

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    The owners get the money. Since Monsanto is a corporation, the shareholders receive those dollars. Often times, in cases like this, shareholders may receive stock in Bayer in lieu of actual dollars. – Pete B. Sep 15 '16 at 14:15
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    And to expand on @PeteB. 's comment: receiving stock in Bayer essentially dilutes the existing shareholders at Bayer, while simultaneously compensation for that dilution with the increased value of the new aquisition. In this case of course the stockholders who received Bayer stock can sell that to somebody else if they want cash. – Michael Sep 17 '16 at 20:19
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Shareholders of Monsanto will get the money from Bayer. Shareholders are independent people or entities.

Think of Monsanto as a thing that shareholders had. This thing is now being purchased by Bayer

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    Excellent, simple answer which reflects the pretty simple realities behind the question. – AnoE Sep 16 '16 at 14:58
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Monsanto is a publicly traded company that trades under the ticker MON. The stock is owned by a wide range of owner around the world. The buyout offer from Bayer is an all cash offer. Bayer will buy all shares of MON at about $128/share. So if I owned 100 shares of MON, I would receive $12,800 or so for my shares. The deal has not yet been approved by regulators, which is why the stock price is hovering around $104/share today.

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    I have a related quick question: if I own lets say, 10 shares, could I refuse selling them? – JS Lavertu Sep 15 '16 at 19:14
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    @JSLavertu Yes. Assuming the sale goes through, you could refuse to sell your shares. At some point, the buy offer expires, and at that time, you'd own 10 shares of a no longer existent company - which would be worthless for almost all intents and purposes. (Maybe some novelty value or value as a collectible some time down the road, but that's really it.) – HopelessN00b Sep 15 '16 at 19:41
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    @HopelessN00b huh? Maybe there are some corporation charters or jurisdictions where your scenario occurs, but in most cases, a shareholder vote or the board of directors can agree to sell all shares including holdouts. Shares held in street name will cash out at the brokerage. Paper shares proceeds will sit in the transfer agent's account until the local jurisdiction lost property process picks it up. – user662852 Sep 15 '16 at 21:39
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    @HopelessN00b you are missing the point that he can't refuse and hold onto worthless shares, they get cashed out without his involvement and then he can pick up the money or not. – JamesRyan Sep 16 '16 at 9:39
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    Even in the case of a private company, it still has owners/shareholders. (It is possible that there could be one individual with 100% ownership, though even many small companies have a plurality of owners.) So a company does not have to be publicly traded for this question to be answered in the same way. With multiple owners, they will split the buyout according to their operating agreement. – GalacticCowboy Sep 16 '16 at 15:36
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It's tempting to think of a corporation as a real thing, because in many respects it seems to be. But it isn't a corporeal thing (despite the root word of the name). It may own corporeal things, and employ corporeal people, but it is not itself a real thing.

Borrowing heavily from Prof Joseph Heath:

It might be better to think of a corporation as the nexus of four separate entities: investors who provide capital, employees who do the work, suppliers who provide raw material, etc., and customers who purchase the products or services the corporation buys.

In different organizations the 'owners' are different: in co-ops it's the suppliers, mutual insurance companies the customers, in employee-owned companies the employees, but in 90% of cases (including Monsanto) it's the investors.

The investors who provided capital by buying shares of stock are the owners, and will be compensated. This frequently happens indirectly: You may own Monsanto stock through a mutual fund or other such aggregate which means that your mutual fund will get the money. Whether that winds up being a profit or loss is more complicated.

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    It's always the investors who own the company, but in some corporate structures the investors may also be employees, customers or suppliers. – Mike Scott Sep 16 '16 at 14:51
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    This answer does nothing at all to tell the OP where the money flows; it also confuses things much more than clearing them up. It is very clear a) what is actually traded in the context of "buying a (publicly traded) company" (it is the shares) and b) where the money goes (to whoever entities held the shares before). – AnoE Sep 16 '16 at 14:57
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    @MikeScott not true at all. Capital for co-ops is acquired via borrowing in a more conventional fashion (usually using the co-ops assets as collateral), not by selling shares (there aren't any per se). Nor does furnishing capital grant ownership, the suppliers of materials are granted ownership in proportion to their input. – Jared Smith Sep 16 '16 at 15:50
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    @MikeScott: then you're disputing the definition of investors as "those who provide capital", instead defining it as "those who provide input"? – Steve Jessop Sep 17 '16 at 20:56
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    @SteveJessop Investors are those who provide capital (financial, material or human) in exchange for equity. A bank that lends you money is not an investor in your business. – Mike Scott Sep 17 '16 at 21:22

protected by Chris W. Rea Sep 18 '16 at 18:56

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