German-headquartered life sciences business Bayer has offered US$62bn to acquire leading seed company Monsanto.
Bayer has offered an all-cash offer of US$122 per share, a 37 per cent premium on the Monsanto share price as of 9 May 2016, the day before Bayer made its offer.
Citing declining land availability, the effects of climate changes on yield and the growing population that will see an additional 3bn billion people in the world by 2050, Liam Condon, Bayer board member of management, said the gap between food requirements and production levels was widening.
“This transition represents the kind of revolutionary approach to agriculture that will be necessary to sustainably feed the world,” said Condon in a media conference on 23 May, adding that the integration of Monsanto and Bayer would create an “innovation powerhouse”.
Bayer management has said the integration of the businesses would be highly complementary for both Monsanto and Bayer, combining Bayer’s experience in crop protection and focus on plant health with Monsanto’s seed portfolio and focus on breeding and yields.
The acquisition would be financed by debt and equity, with Bayer management stating they were convinced of the attractiveness of the offer, and expected a positive answer from the Monsanto board of directors.