In the largest all-cash deal ever, the tie-up will form the world’s largest seeds and pesticides company – controlling more than 25 percent of the global supply of seeds and pesticides, BBC News reports.
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Both Bayer and Monsanto have presence in India, with the USA firm selling genetically modified (GM) cotton seeds in the country for more than a decade. It will also be the largest all-cash transaction on record, ahead of brewer InBev’s $60.4 billion offer for Anheuser-Busch in 2008. Recently, Monsanto’s rival Syngenta was acquired by China’s state-owned firm ChemChina.
The board of the two companies have unanimously approved the agreement. Bayer expects the deal to close by the end of 2017. “$128 per share in all-cash transaction, represents 44% premium to Monsanto shareholders and an aggregate value of $66 billion”, the statement said.
Monsanto, the USA maker of fertilizers and agriculture products, agreed Wednesday to a takeover by Bayer, the German chemical conglomerate, for $56 billion after months of negotiations.
Bayer later sweetened its bid, raising its offer incrementally until agreeing to the deal at $128 per share.
To assuage Monsanto’s concerns, Bayer threw in a $2 billion breakup fee if the deal fell apart on antitrust grounds.
The European competition regulators said publicly before a deal was even signed that they would look at how the combination could affect prices and the availability of seed products as well as research.
The acquisition is subject to customary closing conditions and regulatory approvals.
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Bayer AG CEO Werner Baumann said this is expected to result in significant and lasting benefits for farmers: from improved sourcing and increased convenience to higher yield, better environmental protection and sustainability.
