Bayer to acquire Monsanto in $66 billion deal
By Sara Wyant
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WASHINGTON, Sept. 14, 2016 - Bayer and Monsanto today announced that they signed a definitive merger agreement under which Bayer will acquire Monsanto for $128 per share - up from the latest offer of $127.50 per share - in an all-cash transaction valued at $66 billion.
"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, in a release.
"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 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. Bayer intends to finance the transaction with a combination of debt and equity.
If realized, the deal would create one of the world's largest seed and crop protection companies, and will undoubtedly be heavily scrutinized by federal regulators.
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The companies said they “will work diligently with regulators to ensure a successful closing.” In addition, Bayer has committed to a $2 billion reverse antitrust break fee.
The combined agriculture business will have its global Seeds & Traits and North American commercial headquarters in St. Louis, 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.
"The agriculture industry is at the heart of one of the greatest challenges of our time: how to feed an additional 3 billion people in the world by 2050 in an environmentally sustainable way. It has been both companies' belief that this challenge 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," noted Liam Condon, member of the Board of Management of Bayer AG and head of the Crop Science Division.
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