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Bayer announces USD 62-billion for Monsanto

Bayer announces USD 62-billion for Monsanto

New Delhi : German drugs and chemicals group Bayer announced an offer to buy U.S. seeds company Monsanto for USD 122 per share in cash, or a total value of USD 62 billion, to create the world’s biggest agricultural supplier.

In a statement on Monday, Bayer said that the offer represented a 37 percent premium over the closing price of Monsanto shares on May 9, before rumors of a planned bid emerged.

However, earlier this week Monsanto had disclosed that Bayer had made an unsolicited takeover offer for the group, triggering an investor backlash in which one of the German pesticides and drugs company’s major shareholders called the move ‘arrogant empire-building’.

Bayer’s offer values Monsanto at 15.8 times its 12-month earnings before interest, tax, depreciation and amortization ( EBITDA) as of Feb. 29.

Bayer expects annual earnings contributions from synergies of around USD 1.5 billion after three years, plus additional future benefits from integrated offerings. (ANI)