Following recent market speculation, Germany’s Bayer confirmed today that it is looking to acquire US seeds company Monsanto to create the world’s biggest agricultural supplier.
Bayer has made an all-cash offer worth $122 per share or total value of $62bn. The offer, based on Bayer’s written proposal to Monsanto dated 10 May 2016, represents a premium of 37% over Monsanto’s closing share price of $89.03 on 9 May.
The group said the acquisition of Monsanto would be a compelling opportunity to create a global agriculture leader, while reinforcing Bayer as a Life Science company with a deepened position in a long-term growth industry. Bayer added that it expects annual earnings contributions from total synergies of approximately $1.5bn after year three plus additional integrated offer benefits in future years.
“We have long respected Monsanto’s business and share their vision to create an integrated business that we believe is capable of generating substantial value for both companies’ shareholders,” said Werner Baumann, CEO of Bayer AG.
“Together we would draw on the collective expertise of both companies to build a leading agriculture player with exceptional innovation capabilities to the benefit of farmers, consumers, our employees and the communities in which we operate.”