Bayer will acquire Monsanto for about US$66 billion. The companies announced that they signed a definitive merger agreement under which Bayer will acquire Monsanto for US$ 128 per share in an all-cash transaction. Bayer intends to finance the transaction with a combination of debt and equity. The equity component of approximately US$ 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 US$ 57 billion is committed by BofA Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan.
The combination brings together two different, but highly complementary businesses. The combined business will benefit from Monsanto’s leadership in Seeds & Traits and Climate Corporation platform along with Bayer’s broad Crop Protection product line across a comprehensive range of indications and crops in all key geographies. The deal would create the world’s largest seeds and pesticides company, the new company would control more than 25 % of the world’s supply of seeds and pesticides.
The acquisition is subject to customary closing conditions, including Monsanto shareholder approval of the merger agreement and receipt of required regulatory approvals. Closing is expected by the end of 2017. Bayer agreed to a US$2 bn break fee if the deal does not complete.
The combined business will have its global Seeds & Traits and North American commercial headquarters in St. Louis, MO, USA, its global Crop Protection and overall Crop Science headquarters in Monheim, Germany, and an important presence in Durham, NC, USA, as well as many other locations throughout the U.S. and around the world. The Digital Farming activities for the combined business will be based in San Francisco, CA, USA.