Updated on 23 May 2016
In response to further market speculation and stakeholder inquiries, Bayer is publicly disclosing the contents of its private proposal to acquire Monsanto. Bayer has made an all-cash offer to acquire all of the issued and outstanding shares of common stock of Monsanto Company for $122 per share or an aggregate value of $62 billion. This offer, based on Bayer's written proposal to Monsanto dated May 10, 2016, represents a substantial premium of:
- 37 percent over Monsanto's closing share price of $89.03 on May 9, 2016
- 36 percent over the three-month volume weighted average share price
- 33 percent over the six-month volume weighted average share price
- Last twelve months EBITDA multiple of 15.8x as of February 29, 2016
The acquisition of Monsanto would be a compelling opportunity to create a global agriculture leader, while reinforcing Bayer as a Life Science company with a deepened position in a long-term growth industry. The combination is expected to provide Bayer's shareholders with accretion to core EPS by a mid-single-digit percentage in the first full year after closing and a double-digit percentage thereafter. Initially, Bayer expects annual earnings contributions from total synergies of approximately $1.5 billion after year three plus additional integrated offer benefits in future years.
"We have long respected Monsanto's business and share their vision to create an integrated business that we believe is capable of generating substantial value for both companies' shareholders," said Werner Baumann, CEO of Bayer AG. "Together we would draw on the collective expertise of both companies to build a leading agriculture player with exceptional innovation capabilities to the benefit of farmers, consumers, our employees and the communities in which we operate."
This transaction would bring together leading Seeds & Traits, Crop Protection, Biologics, and Digital Farming platforms. Specifically, the combined business would benefit from Monsanto's leadership in Seeds & Traits and Bayer's broad Crop Protection product line across a comprehensive range of indications and crops. The combination would also be truly complementary from a geographic perspective, significantly expanding Bayer's long-standing presence in the Americas and its position in Europe and Asia/Pacific. Customers of both companies would benefit from the broad product portfolio and the deep R&D pipeline.
"Bayer is committed to enabling farmers to sustainably produce enough healthy, safe and affordable food capable of feeding the world's growing population," said Liam Condon, member of the Board of Management of Bayer AG and head of the Crop Science Division. "Faced with the complex challenge of operating in a resource-constrained world with increasing climate volatility, there is a clear need for more innovative solutions that advance the next generation of farming. By supporting farmers of all sizes on every continent, the combined business would be positioned as the partner of choice for truly integrated, superior solutions."