Monsanto Rejects Bayer’s $65 Billion Acquisition ProposalBy
Monsanto, the agrochemical and seed company, has rejected Bayer’s increased all-cash offer to acquire the company for $125 per share or approximately $65 billion.
The Board of Directors of Monsanto unanimously rejected Bayer’s revised proposal and in a company statement, said it was “financially inadequate and insufficient to ensure deal certainty.” Monsanto said it remains open to continued and constructive conversations with Bayer and other parties to assess whether a transaction is in the best interest of Monsanto shareowners.
In making the revised bid, Bayer had reaffirmed that its offer would not be subject to a financing condition. In addition, Bayer offered a $1.5 billion reverse antitrust break fee, which it said reaffirmed its confidence in a successful closing.
Bayer said it is looking forward to continued dialogue with Monsanto under an appropriate confidentiality agreement allowing access to additional information.
Bayer had first made a bid of approximately $62 billion to acquire Monsanto in May 2016, a proposal that Monsanto had rejected. Bayer’s bid to acquire Monsanto is its first large-scale acquisition effort since becoming a pure-play life sciences company with a focus on pharmaceuticals, crop science, and consumer healthcare with projected 2016 sales in its life sciences business of approximately EUR 35 billion ($40 billion).
Bayer’s focus on life sciences is being led by Werner Baumann, who became chairman of the board of management of Bayer AG on May 1, 2016, succeeding Marijn Dekkers. Bayer took on a new corporate structure in January 2016 with three divisions: pharmaceuticals, consumer health, and crop science, and a separate business unit, animal health. Bayer’s former MaterialScience subgroup, renamed Covestro, became legally and economically independent on September 1, 2015, and Covestro AG was floated on the stock market in October 2015. Bayer currently still owns around 69% of Covestro.