The price is right at $66 billion for Monsanto to sign a definitive merger agreement with Bayer. Under the deal, announced Sept. 14, Bayer will acquire Monsanto at $128 per share in an all cash agreement.
According to the companies, the transaction bring together two different, but highly complementary businesses. The combined business will benefit from Monsanto’s leadership in Seeds & Traits and the Climate Corporation platform along with Bayer’s broad Crop Protection product line across a comprehensive range of indications and crops in all key geographies. Company leaders say that growers will benefit from a broad set of solutions to meet their current and future needs, including enhanced solutions in seeds and traits, digital agriculture and crop protection.
“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,” says Liam Condon, member of the Board of Management of Bayer AG and head of the Crop Science Division. “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.”
While the deal has been approved by Monsanto’s Board of Directors, Bayer’s Board of Management and Bayer’s Supervisory Board, it still is subject to approval of Monsanto’s shareholders.
There’s also quite a bit of skepticism of whether or not the agreement will make it through antitrust regulations — it is the biggest buyout of the year, so far. If regulators do decide to squash the deal, Bayer has agreed to pay $2 billion to Monsanto. The companies say they will work diligently with regulators to ensure a successful closing, 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.
“This combination is a great opportunity for employees, who will be at the forefront of innovation in our sector,” says Werner Baumann, CEO of Bayer AG. “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.”
Bayer has extensive experience in successfully integrating acquisitions from a business, geographic and cultural perspective, and remains committed to its strong culture of innovation, sustainability and social responsibility.
“Today’s announcement is a testament to everything we’ve achieved and the value that we have created for our stakeholders at Monsanto,” says Hugh Grant, Monsanto chairman and CEO. “We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration.”