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Bayer’s $66 billion deal to take over Monsanto represents the biggest foreign takeover ever by a German company.
On Wednesday (September 14) it was announced that Bayer AG (ETR:BAYN) has agreed to buy Monsanto (NYSE:MON) in an all-in cash deal valued at $66 billion, making it not only the biggest deal of the year but also the biggest foreign takeover by a German company.
In an announcement released by Monsanto, it states that Bayer will acquire Monsanto for $128 per share, representing a 44 percent premium to Monsanto shareholders, valued at roughly $56 billion. The remaining $10 billion is debt Bayer will be taking on.
The deal comes after roughly four months of talks between the companies, making them the top seed and chemical producers, as reported by Bloomberg. The merging of the two companies is expected to “dramatically expand” Bayer in the US agriculture sector where Monsanto is a known industry leader.
Forbes reports that the merging is presented as a way to scale Bayer’s operations in seeds and crop protection together with other agricultural specializations due to growing demand in vegetables and grains over the coming years.
Werner Baumann, CEO of Bayer said they are pleased to bring together the two companies.
“This represents a major step forward for our Crop Science business and reinforces Bayer’s leadership position as a global innovation driven Life Science company with leadership positions in its core segments, delivering substantial value to shareholders, our customers, employees and society at large,” he said in Monsanto’s press release.
Hugh Grant, chairman and CEO of Monsanto stated the announcement is a testament to everything they have achieved and, in particular, the value created for its shareholders.
“We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration,” he said in the press release.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
