Bayer AG and Monsanto Co. announced Wednesday that they have signed an agreement under which Bayer will acquire Monsanto for $66 billion in an all-cash transaction.
Both companies’ boards have unanimously approved the agreement, according to a release from Monsanto.
The offer of $128 per share represents a 44 percent premium to Monsanto shareholders, based on Monsanto’s closing share price on May 9, 2016, the day before Bayer’s first written proposal about a takeover.
The acquisition of Monsanto, the Creve Coeur-based seed and chemical maker, by Bayer, the German pharmaceutical and chemical company, gives the combined company control of more than a quarter of the world market for seeds and pesticides, Reuters reports.
The deal comes after multiple rounds of negotiations over the last few months, and it marks the latest example of consolidation within the agribusiness sector, which has seen profits plunge amid an extended commodities slump.
Bayer and Monsanto’s combined agriculture business will make its global Seeds & Traits and North American commercial headquarters in the St. Louis area and have its global Crop Protection and overall Crop Science headquarters in Germany, the companies said.
“Today’s announcement is a testament to everything we’ve achieved and the value that we have created for our stakeholders at Monsanto,” chairman and CEO Hugh Grant said in the release. “We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration.”
The deal is still subject to regulatory approvals and Monsanto shareholder approval of the merger. Closing is expected by the end of 2017.