In big news from the world of Big Agriculture, Bayer has made an unsolicited offer to buy Monsanto. From Bloomberg News:
The St. Louis-based company, with a market value of $42 billion, said it’s reviewing the offer in a statement Thursday. It didn’t disclose the terms of the proposal. Bayer, confirming the bid, said the combination would bolster its position as a life sciences company.
If Bayer successfully buys Monsanto, it would be a mega-deal:
If Bayer buys Monsanto, it could be the biggest acquisition globally this year and the largest German deal ever, according to data compiled by Bloomberg. A takeover of Monsanto would require an enterprise value of as much as 65 billion euros, according to analysts at Citigroup Inc.
Monsanto has recently been in decline and Bayer wants to be a bigger player in the seed business:
Monsanto is facing a slump in agricultural commodities and its offer to buy Syngenta for about $46.2 billion was spurned last year. Sales in the quarter ending in February fell 13 percent from a year earlier to $4.53 billion. Prices for corn and soybeans declined in the last three calendar years, hurting demand for everything from tractors to weedkiller.
A deal with Bayer would help the company reduce its reliance on the agriculture industry, while Monsanto would strengthen Bayer’s seed business, one of the company’s priorities.
Read more on the proposed sale of Monsanto at Bloomberg News.