Bayer to axe Monsanto brand after $63bn deal

Bayer said it would axe the Monsanto name after the $63bn acquisition of the US agri-food company.

The deal will see the German chemical and pharmaceutical group create the world's largest producer of seeds and pesticides.

The acquisition comes two years after the first attempt to purchase Monsanto. It presented its first offer in May 2016 and reached an agreement with the American company in September of that same year.

As of next Thursday, Bayer will become the sole shareholder of Monsanto and its integration will take place as quickly as the disinvestment of assets agreed with Basf has been completed, something that could take a couple of months.

"The acquisition of Monsanto is a strategic milestone to strengthen our portfolio of leading health and nutrition businesses," said Bayer chairman Werner Baumann, noting that the company will "double" the size of its agricultural business. The staff of both companies amounted to 115,000 workers in 2017.

Monsanto attracted significant opposition from environmental campaigners for its promotion of genetically-modified seeds.

Also, Bayer stressed that the acquisition of the US firm will generate significant profit, with a positive contribution to its strategic revenues from 2019. In addition, after adjusting divestments, Bayer estimates that annual synergies will contribute $1.2bn to its adjusted earnings before interest, tax, depreciation and amortisation from 2022.

To finance the acquisition Bayer will carry out a capital increase by issuing 74.6m new shares at €81 each, with the intention of raising some $6bn.