Bayer said the acquisition of Monsanto would be a compelling opportunity to create a global agriculture leader, while reinforcing Bayer as a Life Science company with a deepened position in a long-term growth industry.
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Leverkusen-based Bayer’s unsolicited bid for Monsanto is the largest all-cash takeover on record, according to Thomson Reuters data, just ahead of InBev SA’s Dollars 60.4 billion offer for Anheuser-Busch in June 2008. Bayer shares had tumbled on the news.
Bayer shareholders are likely to be unhappy about the latest development in the deal.
Grant also cited “potential financing and regulatory execution risks” – because a combination of the two companies likely will trigger a US antitrust review – as concerns.
Monsanto Co. Chairman and CEO Hugh Grant also said in a written statement that the initial offer failed to address potential financing and regulatory risks.
In a media call Monday, Bayer CEO Werner Baumann acknowledged the criticism of Monsanto’s reputation, and said the bid spoke volumes about the company’s commitment.
Bayer had no immediate comment about Monsanto’s rejection of the bid.
Monsanto is also said to think its shareholders deserve a better offer.
Bayer detailed Monday its plan to buy Monsanto and add the USA company’s world-leading franchise in high-yielding crop seeds and genetic engineering to Bayer’s broad portfolio of insecticides and herbicides.
Declining prices for major crops over the past three years have built pressure on the global companies that sell fertilizer, seeds and tractors to farmers, who have seen their incomes dwindle alongside grain prices.
Monsanto, headquartered in St. Louis, Mo., said it was reviewing Bayer’s proposal.
ChemChina plans to buy Syngenta for $43bn, after the Swiss company rejected a bid from Monsanto.
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.
With German rival BASF SE (BASFn.DE) having previously considered a tie-up with Monsanto, Bayer has moved to avoid being left behind.
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Monsanto’s market value is around $42 billion. Bayer intends to finance the transaction with a combination of debt and equity.
