Bayer's $62bn move on Monsanto rejected
25 May 2016
Monsanto has rebuffed a $62bn (£42.7bn) bid from German chemicals and pharmaceutical group Bayer.
The company said its board of directors considered the offer “incomplete and financially inadequate”.
However, Monsanto said it remained open to “continued and constructive conversations to assess whether a transaction in the best interest of Monsanto shareowners can be achieved”.
We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business
Hugh Grant, Monsanto chief executive
A combination of the two companies would create the world's biggest supplier of seeds and crop chemicals and follows a wave of consolidation between large global agricultural and chemical suppliers.
In December last year, details emerged of a planned $130bn merger between Dow Chemical and DuPont. This was closely followed in February with news that ChemChina had made a $43 billion (£29.7bn) bid for Swiss seeds and pesticides group Syngenta.
Bayer's offer of $122 per share represented a 37% premium on the closing price of Monsanto shares on 9 May.
"We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business,” said Hugh Grant, Monsanto chairman and chief executive.
“However, the current proposal significantly undervalues our company and also does not adequately address or provide reassurance for some of the potential financing and regulatory execution risks related to the acquisition.”
Bayer has since issued a statement reiterating its belief that a $122 per share all-cash proposal provided "full and certain value for Monsanto shareholders", and said it looked forward to "engaging in constructive discussions with Monsanto regarding the proposed transaction".
“We are pleased that Monsanto’s Board shares our belief in the substantial benefits an integrated strategy could provide to growers and broader society,” said Werner Baumann, chief executive of Bayer.
“We are confident that we can address any potential financing or regulatory matters related to the transaction. Bayer remains committed to working together to complete this mutually compelling transaction.”
