Bayer and Monsanto last week announced that they signed a definitive merger agreement under which Bayer will acquire Monsanto for $128 per share, in an all-cash transaction.
|Bayer will acquire Monsanto for $128 per share in an all-cash transaction
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 per cent on that price.
“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, emplyoees and society at large,” said Werner Baumann, CEO of Bayer AG.
The combined business will benefit from Monsanto’s leadership in crop breeding and farm advisory services, enhancing Bayer’s broad Crop Protection product line that runs through a comprehensive range of indications and crops in all key geographies.
The combination also brings together both companies’ leading innovation capabilities and research and development (R&D) technology platforms, with an annual pro-forma R&D budget of approximately €2.5 billion ($2.81 billion). Over the mid to long-term, the combined business will be able to accelerate innovation and provide customers with enhanced solutions and an optimised product suite, based on analytical agronomic insight supported by digital farming applications.
“We are entering a new era in agriculture – one with significant challenges that demand new, sustainable solutions and technologies to enable growers to produce more with less. This combination with Bayer will deliver just that – an innovation engine that pairs Bayer’s crop protection portfolio with our world-class seeds and traits and digital agriculture tools to help growers overcome the obstacles of tomorrow. Together Monsanto and Bayer will build on our proud tradition and respective track records of innovation in the agriculture industry, delivering a more comprehensive and broader set of solutions to growers,” said Hugh Grant, chairman and CEO of Monsanto.
The combined agriculture business will have its global Seeds and Traits department and North American commercial headquarters in St. Louis, Missouri in the US, its global Crop Protection and Crop Science department headquarters in Monheim, Germany, and an important presence in Durham, North Carolina in the US. These headquarters are in addition to many other locations throughout the US and around the world. The Digital Farming department activities for the combined business will be based in San Francisco, California, US.
“This transaction also enhances Bayer’s strong commitment to the US, building on our 150-year history with operations across 25 states, employing more than 12,000 people in the country. I am convinced that Monsanto will flourish as part of one of the most respected and trusted companies in the world,” said Baumann.
The acquisition is subject to customary closing conditions, including Monsanto shareholder approval of the merger agreement and receipt of required regulatory approvals. Closing is expected by the end of 2017.