Both the companies share similar vision and this merger can create an integrated business that is capable of generating substantial value for the shareholders, said Werner Baumann, CEO of Bayer AG.
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The chairman and chief executive, Hugh Grant, said the offer significantly undervalued the USA agribusiness giant and failed to give enough assurance on how the deal would be financed or overcome possible regulatory challenges.
Bayer’s all-cash offer is 37 percent higher than Monsanto’s stock price before news broke about the possible deal.
Monsanto shares rose 3.1% to $109.30 in late trading in NY, while Bayer rose 3.2% to €87.15 in Frankfurt.
With unconfirmed reports of Monsanto’s coming rejection already in the markets, Bayer shares rebounded 3.2 percent Tuesday to 87.15 euros.
There have been talks about the merger for some time and last week Monsanto chose to issue a statement on the issue, stating that it Bayer had in fact placed a bid.
Monsanto said on Thursday it was consulting financial and legal advisers. It also produces a line of pesticides, which, it says, will fit with Monsanto’s offerings.
And on antitrust, Bayer said it had “a successful track record of working with global authorities to secure the necessary regulatory approvals”.
ChemChina is buying Switzerland’s Syngenta for $43-billion after Syngenta rejected a bid from Monsanto, while Dow and DuPont are forging a $130-billion business.
Hugh Grant, Monsanto Chairman and CEO, said the offer was lacking in two areas.
Agricultural chemical and seed giant Monsanto has turned down German pharmaceutical company Bayer AG’s $62 billion acquisition bid as “financially inadequate”. In a note to clients, Citigroup Inc. analysts Peter Verdult and Andrew Baum said they “would be surprised if Bayer’s first proposal was accepted outright”.
Seven of Monsanto’s top 20 investors declined to comment about Bayer’s offer when contacted by Reuters.
The deal would be part of a wave of consolidation across the agrichemical industry – in part due to increased pressure on profits from lower commodity prices around the world.
The offer from Bayer, which was made May 10 in a letter to Monsanto, marks a reversal of roles for the US company.
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“The disclosed price is at top end of the limit and just about works out”, said Markus Manns, who oversees nearly $300 million at Union Investment GmbH, including Bayer shares.
