SAN FRANCISCO (AA) – Monsanto will be acquired by German pharmaceutical company Bayer for $66 billion, including debt, the companies announced Wednesday.
“We are pleased to announce the combination of our two great organizations,” Werner Baumann, chief executive of Bayer, said in a statement. “This represents a major step forward for our crop science business and reinforces Bayer’s leadership position as a global innovation driven life science company with leadership positions in its core segments, delivering substantial value to shareholders, our customers, employees and society at large.”
It would be the biggest yet acquisition of 2016 once approved by regulators in the U.S., Germany and the EU but the deal between the corporate giants that will hand over more than 25 percent of the world’s seeds and pesticides to Bayer is likely to be heavily scrutinized by government regulators across the globe.
The deal is the largest Bayer has ever signed. The pharmaceutical titan made two previous offers to Monsanto, with the latter’s Board of Directors demanding increases each time. Bayer will pay about $4 billion more than its initial offer and will also give Monsanto $2 billion if the deal is blocked by regulators. The merger will make Bayer a global leader in medicine, agriculture, health products and pesticides.
“Today’s announcement is a testament to everything we’ve achieved and the value that we have created for our stakeholders at Monsanto,” said company CEO Hugh Grant. “We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration.”
Bayer paid a 44 percent premium to Monsanto shareholders. Monsanto stock increased about 1 percent amid the news.
Monsanto remains a controversial company in the U.S. and around the world due to its heavy involvement in the development of genetically modified crops and its ability to control the market of seeds sold to farmers. Representatives from the anti-poverty activist group Global Justice Now called the merger “a disaster for global food system”.
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