German pharmaceutical and crop chemicals manufacturer Bayer AG says talks with Monsanto Co. have advanced and it is now willing to offer more than $65 billion, a 2 percent increase on its previous offer for the world’s largest seeds company.
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Monsanto’s shares have declined since Bayer’s initial bid in May, and closed at US$107.44 in NY on Friday. With no further comment at this time, Monsanto noted, there is no assurance that any transaction will be entered into or consummated.
Bayer said it was in advanced talks with Monsanto, but warned there was no guarantee a deal would result.
Bayer said it would be prepared to offer US$127.50 (RM519.36) per Monsanto share from its previous offer price of US$125 per share only in connection with a negotiated deal.
In July, Bayer raised its earlier offer of US$122 per share to US$125 per share to put Monsanto under pressure to engage further.
Morgan Stanley & Co. and Ducera Partners are acting as financial advisors to Monsanto.
Bayer’s shares were down 0.25 percent at 94 euros by 0934 GMT on Tuesday.
Monsanto subsequently turned down Bayer’s United States dollars 125 a share offer, but said it was open to further talks with the German company, as well as other parties. Monsanto has long sought to become a one-stop shop for farmers by boosting its crop chemicals portfolio to complement its seeds business. Wall Street was closed on Monday for the Labor Day holiday.
Monsanto has also agreed to open its books for Bayer to conduct due diligence checks on the company’s business, two sources close to the matter said.
To that end, it had pursued the purchase of Syngenta AG on at least three separate occasions over the years.
China National Chemical Corp agreed in February to acquire Syngenta.
Monsanto called off its Syngenta bid a year ago, while more recently it has revived talks to buy BASF SE’s agrochemicals unit.
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A deal would create a global leader in genetically modified seeds and pesticides. Dow Chemical Co and DuPont are forging a Dollars 130 billion merger, which is to be followed by a break-up into three businesses. Falling crop prices have weighed on Monsanto’s profits and share price in the past year, making it vulnerable to a takeover. In the past two decades it has pioneered the commercialization of genetically modified organisms, or GMOs. GMO varieties of corn and soybeans now account for the majority of those crops in the US.
