Bayer’s acquisition of Monsanto to be completed by June 7

Bayer’s acquisition of Monsanto to be completed by June 7

Leverkusen: The multi-billion dollar acquisition of US-based biotech major Monsanto by German chemical and pharma major Bayer will compete on June 7th after all the regulatory approvals. Bayer announced its intention of acquiring Monsanto in May 2016 and agreement was signed with the company for USD 128 per share in September 2016.

Werner Baumann, Chairman of the board of management of Bayer AG said in a statement that Bayer will become the sole shareholder of Monsanto on June 7, reported PTI.

As of now, in India, both the companies are producing and selling vegetable seeds, cotton seeds and non-selective herbicides.

As reported by PTI, Bayer has agreed to the divestiture of businesses which generated 2.2 billion euros in sales in 2017 for an aggregate base purchase price of 7.6 billion euros.

According to the conditional approval from the United States Department of Justice, the integration of Monsanto into Bayer can take place as soon as the divestments to BASF have been completed. This is expected to be in approximately two months, he said.

“We have diligently prepared for the upcoming integration over the past two years. Our extensive experience in integrating other large companies has proven that we can and will be successful,” Baumann said.

Bayer will remain the company name. Monsanto will no longer be a company name. After the acquisition gets complete the products will retain the brand name and become part of the Bayer portfolio.

In order to acquire Monsanto, Bayer said it secured initial bridge financing of USD 57 billion. As announced in September 2016, this is being refinanced by a combination of equity and debt transactions, some of which have already been completed. The final equity measure will be a rights issue, which was announced yesterday.

“The acquisition of Monsanto is a strategic milestone in strengthening our portfolio of leading businesses in health and nutrition. We will double the size of our agriculture business and create a leading innovation engine in agriculture…,” Baumann added.

From 2021 onward, that contribution is expected to be in double-digit percentage. Moreover, adjusted for divestments, Bayer expects synergies to deliver annual contributions of USD 1.2 billion to EBITDA before special items as of 2022, it added.

(Inputs from PTI)