Bayer AG

Bayer AG

15 September 2016

Important legal information

Bayer AG, a German drugs and crop chemicals company, agreed to buy Monsanto Co. in the fourth bid with a value of USD 66 billion, making it the largest foreign takeover by a German company.

 

The close of the deal sums up four months of negotiations. Bayer started off with a first offer of USD 122 per share in May, in an attempt to take advantage of Monsanto’s share price decline. The next offer price in July rose to USD 125 per share. Last week the third offer of USD 127,50 per share set a new round of negotiations and lead to today’s agreement.

 

Bayer is going to pay USD 128 a share in cash, which is 21 percent above the closing price of Monsanto on Tuesday trading at New York Stock Exchange. They will fund the transaction with a combination of dept and equity; equity component valued at about USD 19 billion. The transaction also includes a break-up fee of USD 2 billion, if the deal is rejected on antitrust grounds.

 

In the past years the crop and seeds industry has reshaped dramatically. Bayer’s acquisition of Monsanto makes the company the leading industry player with USD 26 billion in combined revenue from agriculture, reducing the number of players in the sector to four. Bayer and Monsanto would through the deal build up the world’s largest supplier of seeds and pesticides.

 

According to Bayer, the transaction will add to core earnings per share in the first full year after the closing of the deal. Buying Monsanto gives the company more than 2,000 varieties of seed for crops – helping the German company to manage growing demand, as farmers seek to boost productivity to feed an estimated amount of 10 billion people globally by 2050.

 

Bloomberg consensus set the 12-month target price to USD 106.44. After the news the stock price grew by almost three percent and was quoting around 95.82. Currently, 13 set Bayer AG on BUY, 14 on HOLD and one on SELL recommendation.

 

04/12/2020 21:35:36

 

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