Bayer Ups Offer to Buy Monsanto

A Bayer canola seed bag

Bayer has boosted its formal offer to purchase Monsanto from US$62 billion to around US$65 billion, saying it has also addressed Monsanto’s concerns about financing and regulatory matters.

The German pharmaceutical and agriculture company announced Thursday it formally submitted a proposal to Monsanto on July 9, raising its all-cash offer from US$122 to US$125 per share.

Bayer says it has financing ready and prepared to be co-underwritten by five banks — BofA Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan. It has also offered Monsanto a US$1.5 billion reverse antitrust break fee to show it is confident it can successfully clear regulatory approvals and close the deal.

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

Monsanto issued a statement Thursday saying it had received a revised proposal from Bayer, but said it will have no further comment until its Board of Directors has reviewed the offer. Monsanto’s board called Bayer’s earlier offer of US$62 billion “incomplete and financially inadequate.”

The news of Bayer upping its offer was made public a day after a report from Bloomberg that Monsanto had revived talks with BASF about a possible combination of their ag businesses.

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