German Bayer bids to buy Monsanto of USA for $62 billion

German pharmaceutical and chemicals giant Bayer AG on Monday said it made an all-cash offer to acquire US biotechnology major Monsanto Co for $62 billion. “Bayer has made an all-cash offer to acquire all of the issued and outstanding shares of common stock of Monsanto Company for $122 per share or an aggregate value of $62 billion,” the Leverkusen-based company said in a statement.

The company, which had made the written proposal to Monsanto on May 10, offered to buy each share at $122, which is over 37 per cent higher than the Monsanto’s closing share price of $89.03 on May 9, 2016. Bayer said it would finance the deal with a combination of debt and equity. The expected equity portion represents 25 per cent of the transaction’s enterprise value and is expected to be raised primarily through a rights offering. BofA Merrill Lynch and Credit Suisse are acting as lead financial advisors to Bayer and will support the financing of the transaction, it added. Bayer said its board has unanimously approved the proposal and is fully committed to pursuing the transaction. 

“Bayer is prepared to proceed immediately to due diligence and negotiations and quickly agree to a transaction. The transaction will be subject to customary closing conditions,” the statement added.

Commenting on the proposed deal, Bayer AG CEO Werner Baumann said: “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.”