Bayer offers USD63bn for Monsanto

German drugs and chemicals giant Bayer has made a €55bn (£43bn) all-cash offer for US agricultural science group Monsanto.

Leverkusen-headquartered Bayer said the combination would be a "compelling opportunity to create a global agriculture leader, while reinforcing Bayer as a life science company with a deepened position in a long-term growth industry”.

It expects the combined business to benefit from Monsanto’s leadership in the Seeds & Traits are and Bayer’s broad crop protection product line across a broad range of indications and crops, as well significantly expanding Bayer’s long-standing presence in the Americas and its position in Europe and Asia-Pacific.

The deal values Monsanto at $122 per share, which is 37% more than they were valued before Bayer made an initial proposal to the US company on 10 May, and is a 33% premium over the six-month volume weighted average share price.

Bayer said the addition of Monsanto would increase core earnings per share by a mid-single-digit percentage in the first full year after closing and a double-digit percentage thereafter.

It expects to make roughly $1.5bn after the third year plus additional benefits in future years.

“We have long respected Monsanto’s business and share their vision to create an integrated business that we believe is capable of generating substantial value for both companies’ shareholders,” said Bayer CEO Werner Baumann.

“Together we would draw on the collective expertise of both companies to build a leading agriculture player with exceptional innovation capabilities to the benefit of farmers, consumers, our employees and the communities in which we operate.”