DUSSELDORF: German pharmaceutical and agrochemical company Bayer plans to conclude its takeover of US seed giant Monsanto by Thursday, the company said.
“From June 7 Bayer will be the sole owner of the Monsanto Company,” Bayer said.
The name Monsanto will disappear after the deal is concluded, Bayer said.”Bayer will remain the company’s name.” The purchase price is currently $63 billion, making it the largest foreign takeover by a German company.
A large part of the purchase — originally around one third of the total price — was to be funded from Bayer’s own capital. This included 4 billion euros from an obligatory conversion bond issued by the company in November 2016.
Buyers will be able to convert the bonds to shares at a later date.
Singapore’s sovereign wealth fund Temasek acquired 3.6 per cent of Bayer’s shares for some $3 billion, which also contributed to the company’s proprietary capital.
On Sunday, Bayer’s board approved the sale of 74.6 million shares at 81 euros each to raise more cash to complete the deal.
Company officials said they hoped to raise 6 billion euros ($7 billion) through the sale. Bayer announced its intention to take over Monsanto in May 2016.
The final hurdle to the deal was crossed a few days ago when the US Justice Department’s Antitrust Division gave its approval.
The European Commission gave Bayer its approval in March. As Bayer and Monsanto operate globally, approval had to be gained in some 30 countries.
Conditions set down by various countries added to the costs for Bayer.
Among the conditions, Bayer must now in two tranches sell off its vegetable and field seed business, its “digital farming” activities and its global glufosinate-ammonium business, which account for sales of 2.2 billion euros ($2.57 billion). Rival BASF has been approved by US and EU authorities to buy these units for 7.6 billion euros.
Bayer takes on high levels of debt and risk with the takeover of Monsanto, which faces criticism for its glyphosate herbicide — sold under the name Roundup and alleged to be carcinogenic by class action lawsuits and some scientific studies.— dpa
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