Bayer Makes Bigger Bid For Monsanto as Talks Near Completion


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Pharmaceutical and crop chemicals giant Bayer AG based in Germany said its talks with Monsanto have been advanced and is willing to now offer over $65 billion, which is an increase of 2% on the offer it previously made for the largest seeds business in the world.

Both companies are coming closer to a consensus said one person close to the matter. Monsanto also agreed to allow Bayer to conduct a due diligence check on the business, said other sources close to the matter.

The previous offer by Bayer was the largest takeover bid of all cash on record with the deal for Monsanto giving the Germany-based business a chance at taking the top spot in the farm supplies industry that is quickly consolidating, combining its business of crop science with the strength on Monsanto’s seed business.

Bayer says now that it will offer as much as $127.50 a share for Monsanto, which is $2.50 higher per share from its previous offer that was $125 a share.

However, a daily in Germany reported on Monday that an offer of as much as $130 a share might be needed for the deal to be completed.

Bayer was considering all its options with regard to Monsanto, including a deal that would be called friendly, a hostile takeover or even withdrawing it offer, said a person who is familiar with the situation.

Shares of Bayer were 0.25% down on Tuesday morning in Frankfurt while shares of Monsanto last traded for $107.44.

Some analysts in Frankfurt believe the bid could go as high as between $130 and $135 per share prior to Monsanto agreeing to the takeover. That has in turn put shares of Bayer under heavy pressure due to the negotiations continuing.

In a prepared statement, on Monday, Monsanto said it was engaged with Bayer in constructive negotiations in which it had been given a non-binding updated proposal for $127.50 a share in cash.

The company, based in St. Louis, Missouri also added that it is continuing its conversations with Bayer while evaluating the new offer from the pharmaceutical giant along with proposals from others. However, Monsanto did not name the other possible suitors.

Some shareholders at Bayer continue to be critical of the possible merger saying it could increase the exposure Bayer has to agriculture at the expense of the business of pharmaceutical.

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