Bayer and Monsanto today announced that they signed a definitive merger agreement under which Bayer will acquire Monsanto for $128 per share – up from the latest offer of $127.50 per share – in an all-cash transaction valued at $66 billion. In its July rejection of Bayer’s offer, Monsanto’s board said it was “insufficient to ensure deal certainty”.
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If realized, the deal would create one of the world’s largest seed and crop protection companies, and will undoubtedly be heavily scrutinized by federal regulators.
The companies have agreed on a break-up fee of $2 billion, the person said.
Falling crop prices and a quest for greater efficiency have triggered a cascade of deals over the past year. Both proposals were rejected by Monsanto as too low. Last week, Bayer came back with a third offer of $127.50.
Bayer’s supervisory board is set to meet Wednesday afternoon, where it is expected to rubber stamp the company’s latest takeover offer, these people said.
Syngenta previous year fought off unwanted suitor Monsanto, only to later agree to a takeover by ChemChina. The combined seeds business will remain headquartered in St. Louis.
Shares in Bayer extended gains to trade 1.8 percent higher on the news. Monsanto had in the past tried unsuccessfully to buy Syngenta. Adding that portfolio to its own vegetable, rice, cotton, and oilseed offerings give Bayer a virtually unassailable position at the head of the market.
German and US competition regulators could reject the takeover due to the combined company’s size and control over the global seeds and insecticide sprays market.
Antitrust experts have said regulators will likely demand the sale of some soybeans, cotton and canola seed assets as a condition for approving the deal. It would also benefit from the USA company’s big presence in North America.
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Bayer was founded in 1863 and made its name by introducing heroin as a cough remedy in 1896 and then aspirin in 1899.
