MOSCOW (MRC) -- Monsanto has accepted an increased takeover bid of USD128/share from Bayer, paving the way for Bayer to acquire Monsanto in an all-cash transaction valued at USD66 billion.
The price is a slight increase from Bayer's bid of USD127.50/share that was announced earlier. It also represents a 44% premium to Monsanto's closing share price on 9 May 2016, the day before Bayer made its initial approach to Monsanto. The deal wil create "a global leader in agriculture," combining Bayer's strengths in agricultural chemicals with Monsanto's strengths in seeds and traits, the companies say.
Bayer's management and supervisory boards, as well as Monsanto's board, have unanimously approved the agreement. "This represents a major step forward for our Bayer CropScience business and reinforces Bayer's leadership postion as a global innovation-driven life science company with leadership positions in it core segments," says Werner Baumann, CEO of Bayer. High Grant, chairman and CEO of Monsanto says, "we believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration."
Bayer and Monsanto expect the deal to create synergies leading to annualized cost savings of about USD1.5 billion starting three years after the transaction's close, plus additional synergies from ongoing integration.
The combined business's worldwide seeds and traits and North American commercial headquarters will be located at Monsanto's St. Louis, Missouri, base. The combined business will have an annual pro-forma R&D budget of about EUR2.5 billion. "It has been both companies' belief that the challenge (of feeding a rising global population) requires a new approach that more systematically integrates expertise across seeds, traits, and crop protection including biologicals with a deep commitment to innovation and sustainable agriculture practices," says Liam Condon, a Bayer board member and head of Bayer CropScience.
MRC