Bayer has been courting the U.S. crops and seeds specialist for months. Having twice rejected the bid from Bayer and the threat of a hostile takeover bid, Monsanto agreed to the improved offer $ 66 billion (59 billion euros) of the German group announced chemist on Wednesday 14th September.
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The takeover comes after months of Bayer submitting offers for the St. Louis-based Monsanto, which specializes in agricultural science and seed making. The $128 per share deal is the largest cash bid on record and will create a company that commands more than a quarter of the world’s market for seeds and pesticides. Bayer said it expected the deal to boost its core earnings per share in the first full year.
German chemical and pharmaceutical major Bayer on Wednesday finalised a merger deal with United States agro-technology company Monsanto for $66-billion (approximately Rs 4.4 lakh crore).
Monsanto’s Board of Directors, Bayer’s Board of Management and Bayer’s Supervisory Board have all unanimously approved the merger agreement.
The annual pro-forma research development budget for the combined companies is about 2.5 billion euro, or $2.8 billion. With that in mind and the fact that Monsanto-Bayer deal will be scrutinized by antitrust authorities of more than 25 countries across the globe, whether the deal would complete is at best a coin-flip. They said growers will benefit from a broad set of solutions to meet their needs in seeds and traits, digital agriculture and crop protection.
Bayer has said combining the companies would generate synergies of $1.5 billion over three years.
As the global agricultural sector races to consolidate, Bayer AG’s $66 billion all-cash deal to acquire Monsanto Co will test growing political and consumer unease in the United States and overseas over the future of food production. Several factors will be weighed including what it might mean to relocate Monstanto from USA soil to Germany, the home of Bayer.
The deal is the largest Bayer has ever signed.
The combined business would locate the global seeds and traits and the North American commercial headquarters in St Louis, Missouri while the main global crop protection and crop science facility would be in Monheim, Germany.
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BofA Merrill Lynch and Credit Suisse are acting as lead financial advisers to Bayer, with Rothschild as an additional adviser. AndNowUKnow will keep you updated as the story unfolds further.
