The German company is aiming to create a one-stop shop for seeds, crop chemicals and computer-aided services to farmers.
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Bayer initially offered $122 per share, then $125 per share, before the companies agreed to a final per-sale sale price of $128.
The agreement was duly accepted between Monsanto’s Directors under the supervision of its CEO Hugh Grant, and Bayer’s Supervisory and Managerial Boards under the supervision of its CEO, Werner Baumann. “We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration”.
The deal, which is valued at $66 billion, including debt, must be approved by Monsanto shareholders and regulators.
In fact, this one is the agriculture industry’s second major consolidation this week, after two Canadian companies, Potash Corporation and Agrium, announced they would also be merging.
According to recent reports out of Frankfurt, Germany, the acquisition negotiations between the German pharmaceutical giant, Bayer, and the US lead producer of genetically engineered seed, Monsanto, have come to a close.
“It’s going to take a lot of innovation to ensure that everybody can be fed”, and the combined company will be able to speed up product improvements to help, Liam Condon, head of Bayer Crop Science, told The Associated Press.
The deal is subject to approval by shareholders and regulators – who are expected to look into whether any part of the business will have a dominant market position. The combined companies will have an annual pro-forma R&D budget of about €2.5 billion. He goes on to say, “I plan to farm in 2017 and I plan to farm in 2027”. “We’re hopeful this combination will enable us to move in new directions”. Shares of Monsanto and other agricultural companies “have been in the dumps along with the agricultural markets”, said Christopher Muir, an analyst with S&P Capital IQ. “What I’m excited about is the opportunity to combine chemistry with biotech at early stages creates an enormous amount of synergy”.
More than 250 members of the organization are in Washington this week to meet with members of Congress and Agriculture Secretary Tom Vilsack, raising concerns that such deals will result in higher costs of seed and fertilizer at a time when farmers are already struggling.
“If you look at gigantic challenges that growers are confronted with of having to produce evermore on limited acreage in order to feed ever-growing population, our goal is to bring better solutions faster to growers so they can increase yield and with that contribute feeding a rapidly growing population”, Baumann said.
Chemical and pharmaceutical company Bayer has completed the acquisition of U.S. seed-maker Monsanto for approximately $66bn (£50bn), finalising the largest cash deal in corporate history.
Following completion of the transaction the combined agriculture business will have its global Seeds & Traits and North American commercial headquarters in St. Louis, Missouri, its global Crop Protection and overall Crop Science headquarters in Monheim, Germany, and an important presence in Durham, North Carolina, U.S., as well as many other locations throughout the U.S. and around the world.
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The world’s population is expected to jump by almost 3 billion people, to 9 billion, by 2050.
