Bayer to acquire Monsanto in all cash transaction

16 Sep '16

2 min read

German chemicals manufacturer Bayer has finalised a deal to acquire Monsanto, a producer of seeds for cotton, soyabean, etc, at $128 per share in an all cash transaction. Based on Monsanto's closing share price on May 9, 2016, the day before Bayer sent its first written proposal to Monsanto, the offer represents a premium of 44 per cent to that price.

Bayer intends to finance the transaction with a combination of debt and equity. The equity component of approximately $19 billion is expected to be raised through an issuance of mandatory convertible bonds and through a rights issue with subscription rights.

Bridge financing for $57 billion has been committed by BofA Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan.

According to Bayer, the combined business will benefit from Monsanto's leadership in seeds and traits along with Bayer's broad crop protection product line across a comprehensive range of indications and crops in all key geographies.

“As a result, growers will benefit from a broad set of solutions to meet their current and future needs, including enhanced solutions in seeds and traits, digital agriculture, and crop protection,” the company observed. (AR)

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