Leverkusen, Germany-based Bayer AG on Sept. 14 agreed to acquire St. Louis-based Monsanto Co. in an all-cash transaction for $128 per share, equating to a total purchase price of approximately $66 billion. The transaction price represents a 44% premium to Monsanto’s share price on May 9, the day before Bayer submitted its first written proposal to acquire Monsanto.
|Hugh Grant, chairman and chief executive officer of Monsanto.|
“We are pleased we received such strong support from our shareowners,” said Hugh Grant, chairman and chief executive officer of Monsanto. “This is an important milestone as we work to combine our two complementary companies and deliver on our shared vision for the future of agriculture. By bringing together our expertise and our resources to drive this shared vision, we can do even more together to benefit growers around the world and to help address broad global challenges like climate change and food scarcity.”
Monsanto said approximately 99% of all votes cast, representing about 75% of all outstanding shares on Nov. 7, the record date for the special meeting, were voted in favor of the merger.
|Werner Baumann, CEO of Bayer AG.|
“The acquisition of Monsanto is driven by our strong belief that this combination can help address the growing challenges facing farmers and the overall agriculture industry today and in the future,” said Werner Baumann, CEO of Bayer AG. “Together, Bayer and Monsanto will be able to offer the new, innovative solutions that our customers need. We look forward to completing the transaction and working closely with Monsanto to ensure a successful integration.”
Bayer first made a play for Monsanto back in mid-May, an offer that was quickly rebuffed by Monsanto. On July 14, Bayer raised its all-cash offer to $125 per share from $122 per share, but still the board of directors of Monsanto described the takeover bid as “financially inadequate and insufficient to ensure deal certainty.”
According to the companies, the transaction will unite two “different, but highly complementary businesses.” The combined business is expected to benefit from Monsanto’s leadership in seeds and traits and Climate Corp. platform along with Bayer’s broad crop protection product line.
The combination also will bring together both companies’ innovation capabilities and R&D technology platforms, with an annual pro-forma R&D budget of approximately €2.5 billion.
Following completion of the transaction the combined agriculture business will have its global Seeds & Traits and North American commercial headquarters in St. Louis, Missouri, its global Crop Protection and overall Crop Science headquarters in Monheim, Germany, and an important presence in Durham, North Carolina, U.S., as well as many other locations throughout the U.S. and around the world. The Digital Farming activities for the combined business will be based in San Francisco, California, U.S.