Germany: Mega-Merger in Agrobusiness Bayer Acquires Monsanto

Editor: Alexander Stark

Bayer and Monsanto signed a definitive merger agreement under which Bayer will acquire Monsanto for an aggregate value of $ 66 billion.

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Werner Baumann (left), CEO of Bayer AG, and Hugh Grant, Chairman and Chief Executive Officer of Monsanto.
Werner Baumann (left), CEO of Bayer AG, and Hugh Grant, Chairman and Chief Executive Officer of Monsanto.
(Source: Bayer AG)

Leverkusen/Germany — 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 % to that price.

Bayer intends to finance the transaction with a combination of debt and equity. The equity component of approximately $ 19 billion is expected to be raised through an issuance of mandatory convertible bonds and through a rights issue with subscription rights. 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.

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, 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.

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