Bayer AG has clinched a US$66 billion acquisition of US seeds firm Monsanto, in a deal that is expected to create the world’s biggest supplier of seeds and agricultural chemicals.
The German drug and crop chemicals giant won over Monsanto Wednesday with an improved offer of US$128 a share, ending months of wrangling, Reuters reports.
The all-cash deal, which marks the largest-ever foreign acquisition by a German firm, represents a 44 percent premium over Monsanto’s share price on May 9, a day before Bayer made its first written proposal.
It comes as the agribusiness sector has been facing pressure for consolidation amid intense competition in grain exports and a souring global farm economy.
But the proposed merger is likely to face an intense and lengthy regulatory scrutiny in the United States, Canada, Brazil, the European Union and elsewhere.
If the deal closes, it will create an entity that commands more than a quarter of the combined world market for seeds and pesticides in the farm supplies industry.
The transaction includes a US$2-billion break-up fee that Bayer will pay to Monsanto should it fail to get regulatory clearance.
Bayer expects the deal to close by the end of 2017.
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