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Bayer sweetens offer to acquire Monsanto

July 15, 2016
Chemical Value Chain

Bayer, possibly impelled by Wednesday’s report that BASF and Monsanto are in talks to combine their agricultural chemicals businesses, today announced a slightly sweetened offer to acquire Monsanto.

Bayer also said it could provide certainty to Monsanto management and shareholders on financing and regulatory matters. Bayer said it has increased its all-cash offer to $125 from $122 per share, valuing Monsanto at $63.5 billion, after additional information received in private discussions.

Bayer also said it has comprehensively addressed Monsanto’s questions concerning financing of the transaction, reaffirming that it is not subject to a financing condition. In addition, Bayer has offered a $1.5 billion reverse antitrust break fee. Bayer says the revised offer provides compelling value creation potential for Bayer shareholders and says it remains fully committed to pursuing the acquisition.

“Over the past several weeks Bayer has engaged in private talks with Monsanto. Following receipt of additional information Bayer raised its all-cash offer to Monsanto shareholders from $122 to $125 per share verbally on July 1 and in an updated proposal submitted to Monsanto on July 9. In addition, it has comprehensively addressed Monsanto’s questions concerning financing and regulatory matters and is prepared to make certain commitments to regulators, if required, to complete the proposed acquisition,” Bayer said today. Bayer said it remains confident in its ability to obtain all necessary regulatory approvals in a timely manner given complementary geographic and product portfolios

A Syndicated Loan Facility Agreement sufficient to provide the entire transaction financing is ready and prepared to be co-underwritten by five banks, BofA Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan, Bayer says.

“We are convinced that this transaction is the best opportunity available to provide Monsanto shareholders with highly attractive, immediate and certain value. Bayer is fully committed to pursuing this transaction,” said Werner Baumann, CEO of Bayer AG. The revised offer represents a premium of 40% over Monsanto’s closing share price on 9 May 2016.

The specific terms of any definitive transaction agreement remain subject to the final approval of Bayer’s supervisory board. Monsanto says it has received the updated proposal and that it will be reviewed by the company’s board of directors and legal and financial advisors. In a statement, Monsanto says it “will have no further comment until its board of directors has completed its review.”

By Natasha Alperowicz

Source: Chemical Week

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