Monsanto says it will reject the $62 billion bid from Bayer and seek a higher price. However, company officials say they believe a deal with the German-based Bayer could get antitrust and regulatory approval.
The offer rejection does not mean a deal is out of the question. However, the Monsanto board of directors says the current offer is incomplete and financially inadequate. Bayer will have to decide if it wants to raise its bid in the face of shareholder criticism that the $122 per-share price tag is already too high. Other options for Bayer include walking away from the deal or mounting a hostile takeover bid. Bayer said Monday it would finance the bid with a combination of debt and equity. The Monsanto board of directors has not set a timeline for further discussion with Bayer. Global agrochemical companies are trying to consolidate, in part, due to lower commodity prices. Seed and pesticide markets are also increasingly converging.
Meanwhile, Bayer says it looks forward to engaging in constructive discussions with Monsanto regarding the proposed transaction. Bayer reiterated that its $122 per-share, all-cash proposal provides full and certain value for Monsanto shareholders.
“We are pleased that Monsanto’s board shares our belief in the substantial benefits an integrated strategy could provide to growers and broader society,” said Werner Baumann, CEO of Bayer AG. “We are confident that we can address any potential financing or regulatory matters related to the transaction. Bayer remains committed to working together to complete this mutually compelling transaction.”