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Bayer offers $62 billion for Monsanto in all cash deal

Published on 23/05/16 at 09:04am

German pharma and crop sciences giant Bayer (ETR: BAYN) has made an unsolicited $62 billion all-cash offer for Monsanto Co (NYSE: MON) in a deal that could potentially create the largest agricultural supplier on the planet.   

The company revealed the offer Monday in response to market speculation and stakeholder inquiries, Bayer said.

Bayer offered $122 per share in an all-cash bid in its May 10 written proposal, the Leverkusen-based company said in a statement.  

The combined entity is expected to add to Bayer’s core earnings per share by a mid-single-digit percentage in the first full year after closing and a double-digit percentage thereafter. The company also sees annual earnings contributions from total synergies of about $1.5 billion after year three, Bayer said.

Werner Baumann, chief executive of Bayer, said: “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.” 

Bayer intends to finance the transaction with a combination of debt and equity. The expected equity portion represents about 25% of the transaction value and is expected to be raised primarily via a rights offering. 

The deal would bring together seeds & traits, crop protection, biologics, and digital farming platforms, Bayer said. The merger would also help Bayer significantly expand presence in the US and its position in Europe and Asia/ Pacific.

BofA Merrill Lynch and Credit Suisse are lead financial advisors to Bayer. 

Last week the company acknowledged it was reveiewing a proposal for Monsanto. 

Anjali Shukla

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