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Monsanto agrees to purchase offer by Bayer

Bayer and Monsanto today announced that they signed a definitive merger agreement under which Bayer will acquire Monsanto for USD 128 per share in an all-cash transaction.

The successful bid comes after German-based Bayer was forced to increase its price per share 3 times in the past 4 months.

The deal will be subject to numerous approvals by regulators. Already, critics in the US and the EU have voiced concern about creation of the behemoth entity which will control “about a quarter of the world’s seed and pesticide market”.

If the merger is allowed to proceed, it will be the largest takeover in history by a German company.

Monsanto’s Board of Directors, Bayer’s Board of Management and Bayer’s Supervisory Board have unanimously approved the agreement. Based on Monsanto’s closing share price on May 9, 2016, the day before Bayer’s first written proposal to Monsanto, the offer represents a premium of 44 percent to that price.

“We are pleased to announce the combination of our two great organizations. This represents a major step forward for our Crop Science business and reinforces Bayer’s leadership position as a global innovation driven Life Science company with leadership positions in its core segments, delivering substantial value to shareholders, our customers, employees and society at large,” said Werner Baumann, CEO of Bayer AG. 

“Today’s announcement is a testament to everything we’ve achieved and the value that we have created for our stakeholders at Monsanto. We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration,” said Hugh Grant, Chairman and Chief Executive Officer of Monsanto.

The Bayer-Monsanto comes on the back of a flurry of merger activity in global agribusiness. Dow Chemical is awaiting regulatory approval for its merger with Dupont, and earlier this year ChemChina agreed to buy Swiss company Syngenta for $44 billion.

What do you think about the Monsanto takeover? Will it be good for innovation or choke competition? Leave us a comment below!

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