Germany-based life science company Bayer (BAYRY) and US seed giant Monsanto (MON) announced a merger agreement on Tuesday morning worth $66 billion.
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Bayer has been courting the United States crops and seeds specialist for months.
Bayer will pay Monsanto shareholders $128 a share in cash, the largest cash bid on record. Bayer said it’s so confident of approval that it’s offered Monsanto a $2 billion breakup fee if the deal falls through.
“This represents a major step forward for our crop science business”, Bayer chief executive Werner Baumann said in the statement.
It’s the third time Bayer has cranked up its offer, and this time it was enough to win the backing of Monsanto’s board.
Monsanto CEO Hugh Grant assured shareholders that the Bayer buyout was in their best interest.WKIMEDIA, JANINE MORAESIn a deal that could create the world’s biggest agricultural and chemical company, Germany-based Bayer has initiated a multibillion dollar takeover of the St. Louis-headquartered Monsanto. The global crop protection and crop science divisions will be located in Germany. The Creve-Coeur based company announced on Wednesday it has reached a $66-billion deal with Bayer AG. He said both companies were committed to systematically integrating expertise across seeds, traits and crop protection, including biologicals, alongside investment in innovation and sustainable agriculture practices. This merger, the two groups hope to complete by the end of 2017, should also inflate their gross operating profit of about $ 1.5 billion after three years. The price includes the assumption of $9 billion of Monsanto debt. In addition, Bayer has committed to a Dollars 2 billion reverse antitrust break fee, reaffirming its confidence that it will obtain the necessary regulatory approvals.
Both Bayer and Monsanto have deplorable reputations with the American people as both have been often embroiled in litigation and scandal over damages caused to American consumers.
Monsanto shareholders still have to approve the deal, as do regulators – with Bayer staking a $2 billion reverse antitrust break fee in case the merger is rejected by U.S. or European authorities. The Digital Farming activities for the combined business will be based in San Francisco, California, U.S.
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Siemens AG two years ago bought USA oil-services company Dresser-Rand Group for $7.7 billion in a bid to capitalize on America’s fracking and shale boom.
