Bayer upped its bid to buy Monsanto to $65 billion in a move to create the world’s largest supplier of crop seeds and chemicals, says The Wall Street Journal. The proposed merger is part of a wave of consolidation in the seed and agricultural chemical industry, including the Dow-DuPont merger and the purchase of Syngenta by state-owned ChemChina.
Monsanto rejected Bayer’s bid of $62 billion, or $122 a share, in May, saying the proposal “significantly undervalues our company.” The German pharmaceutical company is back with a new bid at $125. Some analysts say fair value for Monsanto, already the world’s largest seed company, would be $130 to $140 per share.
Bayer insists “its offer fully captures the intrinsic value of Monsanto,” and offers a 40 percent premium to Monsanto’s closing share price on May 9. “We are convinced that this transaction is the best opportunity available to provide Monsanto shareholders with highly attractive, immediate and certain value,” says Werner Baumann, CEO of Bayer AG. Together, Bayer and Monsanto have $67 billion in annual sales.