The German chemical and pharmaceutical company – Bayer AG said it made a bid for the US seed producer Monsanto Co (NYSE: MON), and offered $ 122 per share in cash.
The total amount of proposal, taking into account debt, is $ 62 billion. The deal will create the world's largest supplier of agricultural products.
Bayer said on Monday that the proposal made to the management of Monsanto, is 37 % more than the closing price of the company shares on May 9, before the advent of the information about a possible merger.
Last week, Monsanto reported that Bayer group has made a takeover bid, prompting a storm of criticism of investors; one of the major shareholders of the German company called the move "an arrogant establishment of an empire."
Bayer said it plans to finance the transaction out of debt and equity capital, primarily through preferential placement. Shareholders' equity will amount to about a quarter of the cost of the transaction.
Bayer expects the annual profit of the combined company will be approximately $ 1.5 billion in three years, plus the additional benefits of integrated proposals associated with the desire to combine the development of Bayer sales of seeds and chemicals.
"We have for a long time treated with respect the business of Monsanto and share their vision for the creation of integrated business, which we believe is able to generate significant value for shareholders of both companies", - said in a statement the head of Bayer, Werner Baumann.
After the news, the share price of Bayer AG fell 3.2%.
As a whole, the German index – DAX fell 0.8% in early Monday trading.
Besides the weak company reports, the index was influenced by lower oil prices. The quotes of Brent oil fell 1%, to $ 48.25 a barrel on news of the restoration of production in Canada, as well as a further increase in production in Iran.