Bayer, a German multinational chemical and pharmaceutical company, has signalled its intention to takeover Monsanto, an American multinational agrochemical and agricultural biotechnology corporation.
If the deal goes through, it could be valued at more than $42 billion, which is Monsanto’s current market capitalization.
According to Wall Street Journal, Monsato has confirmed the approach, saying it received “an unsolicited, non-binding proposal” for a potential acquisition. And the board of directors is reviewing the proposal
WSJ also stated Bayer confirmed that executives from the German company had met with executives of Monsanto to discuss a possible acquisition, saying a tie-up would “create a leading integrated agriculture business.”
Bayer supervisory board member Reiner Hoffmann said later Thursday that Monsanto “is a complementary business. There will be synergies.”
The merger of these companies could boast $67 billion in annual sales and create the world’s largest seed and crop-chemical company. A successful deal would ratchet up consolidation in the agricultural sector, after rivals Dow Chemical Co., DuPont Co. and Syngenta AG struck their own deals over the past six months.
Absorbing St. Louis-based Monsanto, the world’s top seed company in terms of sales, would push Bayer far more deeply into agriculture, which currently accounts for about 22% of the German company’s business. Monsanto’s $15 billion in seed and herbicide sales could make agriculture about 40% of the combined entity’s business, with the rest coming from pharmaceuticals and consumer health products.
