Bayer increases Monsanto bid to US$65bn

GERMAN chemical giant Bayer AG sweetened its bid for US agrochemical company Monsanto to around US$65bn.

Bayer announced it would raise its all-cash offer of US$125/share, up from the US$122/share (worth US$62bn in cash) which was rejected in May. Hugh Grant, Monsanto’s CEO, said the previous offer “significantly undervalue[d]” the company.

Bayer also offered a US$1.5bn reverse-breakup fee in case the intended merger is blocked by regulators on antitrust grounds. The company said it is confident in closing this offer, as it addresses Monsanto’s previous concerns over financial and regulatory risks.

Werner Baumann, CEO of Bayer, said: “We are convinced that this transaction is the best opportunity available to provide Monsanto shareholders with highly attractive, immediate and certain value.”

Monsanto has acknowledged the offer and said its board of directors will review the offer and comment further when it reaches a decision.

Reports of early discussions about Monsanto buying BASF’s agricultural-solutions unit yesterday has strengthened Monsanto’s negotiating position with Bayer.

A drop in crop prices has seen a succession of multi-billion dollar merger agreements between the top agrochemical companies in the last 12 months. Dow and DuPont are working toward a US$130bn megamerger agreed in December 2015. ChemChina has also agreed to buy Syngenta for US$43bn in February.