Monsanto, the US maker of fertilizers and agriculture products, agreed Wednesday to a takeover by Bayer, the German chemical conglomerate, for $56 billion after months of negotiations.
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Going forward the price of Monsanto will move closer to $128 per share as regulation hurdles clear.
According to the companies, the transaction will unite two “different, but highly complementary businesses”.
St. Louis-based Monsanto is infamous both for its genetically modified crops and for being the world’s largest seller of seeds.
Bayer and Monsanto announced Wednesday that they’ve signed an agreement to merge the two companies together. Specifically, the combined business would benefit from Monsanto’s leadership in seeds and traits and Bayer’s broad crop protection product line across a comprehensive range of indications and crops.
Werner Baumann (left), CEO of Bayer AG, and Hugh Grant, Chairman and Chief Executive Officer of Monsanto. Bayer said it expected the deal to boost its core earnings per share in the first full year. If approved, Monsanto will continue to be based in St. Louis.
No specific details were immediately disclosed about the fate of Bayer’s North Carolina employees. The combined entity will control almost a quarter of the global market for seeds and crop chemicals.
What’s more, “the record of mergers in these industries is poor at best”, Balto said in an email. The deal “creates great synergies with seeds and traits and data sciences”. The US company has rejected that proposal, as well as further bids of Bayer. Less than three years later, it reemerged as a local company.
FILE – In this May 23, 2016, file picture the Bayer AG corporate logo is displayed on a building of the German drug and chemicals company in Berlin, Germany.
And this deal isn’t done yet. “I like to listen to what the stock market tells you; and what the stock market is telling you is, it’s a flip of a coin”. Meanwhile, Dow and Dupont are in the midst of a tie-up. At 1.15 pm, shares of Monsanto were trading 1.41 per cent up at Rs 2608.45.
The drop in commodity prices has put pressure on companies like Monsanto, with farmers lowering their demand for supplies.
In Europe, debate about glyphosate has reached Brussels, where European Union member states in July voted to restrict its use by the bloc’s farmers for 18 months.
“These mergers boost the profits of huge corporations and leave Americans paying even higher prices”, he said.
That was the idea behind Monsanto’s swoop on Syngenta AG previous year. Monsanto was already the largest seed company in the world. The equity component of about Dollars 19 billion is expected to be raised through an issuance of mandatory convertible bonds and through a rights issue with subscription rights.
“Bayer and Monsanto today announced that they signed a definitive merger agreement under which Bayer will acquire Monsanto for Dollars 128 per share in an all-cash transaction”, the firms said in a statement.
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It would trump Daimler’s 1998 merger with Chrysler, which valued the USA carmaker at more than $40 billion. Monsanto-Bayer would have 28 percent.
