Monsanto rejects Bayer $62 billion acquisition bid
Agricultural giant Monsanto has rejected US $62 billion acquisition bid from pharmaceutical and chemical company Bayer AG.
Monsanto this week said its Board of Directors unanimously believed the proposal was incomplete and financially inadequate. The company however said it was still open to further negotiations.
“We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business,” said Hugh Grant, Monsanto Chairman and Chief Executive Officer.
“However, the current proposal significantly undervalues our company and also does not adequately address or provide reassurance for some of the potential financing and regulatory execution risks related to the acquisition,” he said.
In response to Monsanto’s decision, Bayer AG said its offer provided “full and certain value” for the company but it was looking forward to new discussions with Monsanto.
“We are pleased that Monsanto’s Board shares our belief in the substantial benefits an integrated strategy could provide to growers and broader society,” said Werner Baumann, Chief Executive Officer of Bayer AG.
“We are confident that we can address any potential financing or regulatory matters related to the transaction. Bayer remains committed to working together to complete this mutually compelling transaction,” Baumann said.
Concequences if bid were to be successful
If the acquisition proceeds, Monsanto and Bayer AG will become the world’s largest seller of farming chemicals and seeds.
Bayer AG was established in Germany over 150 years ago and specialises in chemicals and pharmaceuticals.
It sells a wide range of pharmaceutical drugs in Australia and New Zealand along with health products for animals and livestock. Bayer AG also sells numerous herbicides, insecticides and other agricultural related products.
Monsanto was established in 1901 and is based in the US. It is a seed producer but also manufacturers herbicides. It is one of the wold’s largest producers of genetically modified (GM) crops.
In Australia, Mansanto is well-known as the producer of Round Up and for its role in backing and funding a farmer who grew GMO crops. It successfully defended a legal action brought by an organic farming neighbour. The case was reported on several occasions by Australian Food News.