The two companies announced the deal on Wednesday. It has been approved by Monsanto’s Board of Directors and Bayer’s Board of Management and the company’s Supervisory Board.
The acquisition remains subject to closing conditions and regulatory review, including approval by Monsanto shareholders, the companies said. It is anticipated to be closed by the end of 2017.
The Germany-based Bayer will pay $128 per share in the all-cash transaction, which is a premium of 44% based on St. Louis-headquartered Monsanto’s closing share price from May 9 – the day preceding Bayer’s first written proposal, said the companies. And Bayer has agreed to a $2bn reverse antitrust break fee.
Monsanto brings its past work in seeds and traits and climate corporation platforms to the deal, they said. While Bayer has its efforts and product line in crop protection.
“This combination with Bayer will deliver just that – an innovation engine that pairs Bayer’s crop protection portfolio with our world-class seeds and traits and digital agriculture tools to help growers overcome the obstacles of tomorrow,” said Hugh Grant, Monsanto CEO, in a release.
If the sale is approved, the companies would have a combined research and development budget of about €2.5bn, they said. Efforts are expected to focus on generating products based on information from digital farming applications.
The combined business would locate the global seeds and traits and the North American commercial headquarters in St Louis, Missouri while the main global crop protection and crop science facility would be in Monheim, Germany. Other locations would include a presence in Durham, North Carolina and a digital farming facility in San Francisco, California.