Bayer, Monsanto Sign Merger Agreement

Bayer and Monsanto announced they signed a merger agreement under which Bayer will acquire Monsanto for $128 per share in an all-cash transaction. The total value of the deal is around $66 billion, making it the largest merger of 2016 so far.  

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 percent to that price.

“We are pleased to announce the combination of our two great organizations,” Bayer AG CEO Werner Baumann said. “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.”

The deal would create a company commanding more than a quarter of the combined world market for seeds and pesticides in the fast-consolidating farm supplies industry. The deal follows the Syngenta-ChemChina and Dow-DuPont mergers announced earlier this year. 

“Today’s announcement is a testament to everything we’ve achieved and the value that we have created for our stakeholders at Monsanto,” Monsanto Chairman and CEO Hugh Grant said. “We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration.”

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, its global Crop Protection and overall Crop Science headquarters in Monheim, Germany, and an important presence in Durham, N.C., 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. 

“This combination is a great opportunity for employees, who will be at the forefront of innovation in our sector,” Baumann said. “This transaction also enhances Bayer’s strong commitment to the U.S., 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.”