NEW YORK/FRANKFURT – German drugs and chemicals group Bayer AG made an unsolicited takeover offer for U.S. seeds company Monsanto Co, aiming to create the world's biggest agricultural supplier and integrate pesticides and seeds markets. Monsanto disclosed the approach on Wednesday before Bayer confirmed its move, though neither gave the proposed terms. Sources said Bayer would pay Monsanto shareholders with cash and stock, though the offer price could not be learned. Bernstein Research analyst Jeremy Redenius estimated the price at 41.9 billion ( 47 billion), plus 6.7 billion in assumed debt. He said Bayer might need a 27 billion share issue to help to fund the purchase.
Bayer's potential acquisition of Monsanto Co. would create a giant seed and farm chemical company with a strong footprint in the U.S., Europe and Asia, combining two businesses with complementary geographical focus. But Bayer might have to shed part of its business because of antitrust concerns. And the price tag on any deal would be huge: Monsanto's market value is around 42 billion. Germany-based Bayer said Thursday in a short statement that its executives had met recently with their Monsanto counterparts "to privately discuss a negotiated acquisition" of the specialist in genetically modified crop seeds. The news of a potentially costly deal sent Bayer shares tumbling 8.2%.
On Tuesday, marriage negotiations between seed/pesticide giant Monsanto and its suitor, German behemoth Bayer, got hotter than a corn field at high noon in late summer. Bayer sweetened its offer to 56.5 billion Tuesday afternoon, just as Monsanto's Board of Directors was scheduled to meet to consider the offer, according to Bloomberg News. The companies could agree to terms as early as Wednesday--but the merger could "still fall apart," the news service reported, adding that "if successful, it would lead to the biggest deal this year and the largest ever by a German company." In its current incarnation, Bayer is mainly a pharmaceutical company, with interests in prescription drugs, over-the-counter staples like aspirin, and animal medicines. But it also has a large division devoted to selling seeds and pesticides--and it has been itching for months to expand those business lines by taking over Monsanto.
Drug and chemicals giant Bayer AG made an unsolicited takeover offer for agrichemicals behemoth Monsanto Co., both companies said in separate statements, confirming ongoing speculation. Details of the negotiations and the proposed deal were not made public, but a merged entity would be the world's largest seed and agrichemicals company, with a combined market cap of about 130 billion. Monsanto issued a statement Wednesday "in response to recent media reports" to say "it has received an unsolicited, non-binding proposal from Bayer AG for a potential acquisition of Monsanto, subject to due diligence, regulatory approvals and other conditions." The St. Louis, Missouri, company said the proposal was being reviewed by its board of directors and that it will make no further comment until the review is complete. "There is no assurance that any transaction will be entered into or consummated, or on what terms," the short statement added.
German drug and crop chemical group Bayer AG on Thursday announced details of a sweetened 64 billion bid for Monsanto Co. as it tries to put the U.S. seed company under pressure to engage further. Analysts and some Monsanto shareholders were quick to opine that Bayer's latest offer, the largest all-cash takeover bid on record, was unlikely to entice Monsanto. Bayer, however, is hoping that the sweetened offer will spur enough Monsanto shareholders to call on the company's management to be more accommodative. Global agrochemicals companies are racing to consolidate, partly in response to a drop in commodity prices that has hit farm incomes. Bayer made its bid for Monsanto public in May, but the two companies have made little progress since in negotiating a deal.