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.
Two major health insurance deals that would reshape the industry's landscape -- Anthem Inc.'s purchase of Cigna Corp. and Aetna Inc.'s deal to acquire Humana Inc. -- appear to be in trouble amid concerns they would reduce competition. The Justice Department, which has been reviewing both transactions, is preparing lawsuits to block them, Bloomberg News and the Wall Street Journal reported Tuesday. A decision whether to file the suits could come as early as this week, and the companies could fight in court or agree to settle, the reports said. A Justice Department spokesman declined to comment. Shares of the four companies fell 2% to 4% on Tuesday.
Wall Street expressed growing doubts about a pending 54 billion merger of U.S. health insurers Anthem Inc and Cigna Corp on Monday as news of management squabbles added to concerns over its review by antitrust regulators. Cigna shares closed down 4 percent at 126.15, well below Anthem's original 188 per share offer of cash and stock announced last July. Anthem shares fell 1.8 percent to 133.18. "The market is telling you that it feels the probability of the deal is significantly less than 100 percent," Morningstar analyst Vishnu Lekraj said in a telephone interview. He declined to provide his own probability forecast.
Shelley Rouillard, director of the California Department of Managed Health Care, announced her decision Monday. As a condition of the approval, Aetna agreed to limit premium increases in the small group market and to allow greater state oversight of its rates. The company will also have to keep certain decision-making functions in California and must invest in various health initiatives. The proposed 35-billion cash-and-stock deal would make Hartford, Conn.-based Aetna a sizable player in the rapidly growing Medicare Advantage business, which offers privately run versions of the federally funded healthcare program for the elderly and some people with disabilities. The merger still requires approval by the U.S. Department of Justice.
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%.