The agrochemical company has rejected a $62 billion takeover offer from the German pharmaceutical giant Bayer.
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The German company made the offer to buy US-based Monsanto last week, but this latest announcement gives further detail about the level of cash involved.
A Bayer spokesperson said the company would review and consider Monsanto’s response.
The chairman and chief executive, Hugh Grant, said the offer significantly undervalued the United States agribusiness giant and failed to give enough assurance on how the deal would be financed or overcome possible regulatory challenges.
Bayer is highly confident in its ability to finance the transaction, based on advanced discussions with and support from its financing banks, Bank of America Merrill Lynch and Credit Suisse.
Bayer CEO Baumann said the company has extensively assessed possible product portfolio issues “and have found very few due to the complimentary nature of each company’s products and the geographies of their markets”.
The offer, which values Monsanto’s outstanding shares – without accounting for debt – at about $53 billion, represents a 37 per cent premium to the May 9 closing price. It is perhaps best know for introducing aspirin to market and trademarking its name-although its USA trademark was confiscated by the government during World War I. It is perhaps less known that Bayer also introduced heroin to market and trademarked the name as a cough medicine.
At time of writing, Bayer was up 3.58 percent at $98.90, while Monsanto was up 2.57 percent at $108.72. Bayer shares had tumbled on the news.
Both companies are familiar brands on farms around the globe.
A combination of the two businesses would create a giant seed and farm chemical company with a strong presence in the U.S., Europe and Asia. There’s also lingering concern over whether the deal will be passed by competition authorities as the combination of both companies could account for more than 30 percent of the global crop-inputs business. The German company also expects savings of about $1.5 billion annually from the fourth year following the deal. Dow Chemical is forging a $130bn business with DuPont. The company previously sought to buy Swiss pesticide maker Syngenta, but had to abandon the US$43.7 billion bid in August after the other company refused to agree to a deal.
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Bayer detailed Monday its plan to buy Monsanto and add the US company’s world-leading franchise in high-yielding crop seeds and genetic engineering to Bayer’s broad portfolio of insecticides and herbicides.
