Monsanto management accepted the improved offer on the part of the German chemical and pharmaceutical company Bayer to acquire the US producer of seeds for about $ 66 billion, putting an end to a long period of negotiations.
The deal on the acquisition of Monsanto for $ 128 per share compared with the previous proposal from Bayer, $ 127.50 per share, is the largest in this year. This will create a company that will control more than a quarter of the world market of seeds and pesticides.
However, antitrust authorities are likely to carefully examine the agreement, and some shareholders of the same Bayer sharply criticized the merger plan for months, which, in their view, threatens to overpayment and neglects the pharmaceutical business of the company.
Bayer and Monsanto agreed on compensation of $ 2 billion, which the German company will pay the US one if the regulators would not approve the deal. The German company is waiting for its closing before the end of 2017.
Bayer reported that offers a premium of 44% percent over the share price of Monsanto compared to the closing price of 9th of May trading session, the day before the German company has sent its first written offer to purchase.
It plans to raise $ 19 billion in order to help finance the deal by issuing convertible bonds and new shares for existing shareholders, and also said that banks will give it bridge loans in the amount of $ 57 billion.
Bayer and Monsanto have started negotiations to find ways of association in March, and in May, the German company offered to buy Monsanto for $ 122 per share.
Now, Bayer shares rose 3.7% to 96.79 euro. Monsanto shares on the OTC trading gained 0.2% to $ 106.3.