German pharmaceutical giant Bayer and US agrochemical and crop seeds group Monsanto have agreed to a 66-billion-dollar takeover bid, the two companies announced Wednesday.
Bayer's cash offer of 128 dollars per share was accepted after months of courtship. Three lower takeover offers from Bayer were rejected by Monsanto, a company known for pioneering the commercialization of genetically modified organisms (GMOs).
Their joint statement described the companies as "two different, but highly complementary businesses." Amid industry-wide consolidation, the deal creates the world's biggest maker of seeds and pesticides.
"This represents a major step forward for our crop science business and reinforces Bayer's leadership position as a global innovation-driven life science company with leadership positions in its core segments," Bayer AG chief executive Werner Baumann said.
The takeover is the biggest ever by a German company.
Monsanto's Roundup-Ready technology, which makes crops genetically immune to its widely used Roundup herbicide, rapidly came to dominate US soya production in the late 1990s. The same seeds and other GMOs have met implacable political opposition in Europe and other markets.
"We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration," Monsanto chief executive Hugh Grant said.
Environmental organizations criticized the deal, saying small farmers and the environment will lose. The takeover of Monsanto by Bayer will increase the worldwide dependence of farmers on multinational concerns, promote the use of genetically altered seeds and dangerous chemicals and aid in the advance of environmentally damaging monocropping, they said in a news release.
Bayer's fourth offer constitutes a premium of 44 per cent above Monsanto's share price prior to the first written merger offer on May 10.
The boards of Monsanto and Bayer have unanimously approved the deal. Monsanto shareholders must still vote on the combination, which is slated for completion in late 2017, pending approval by regulators in the US and Europe.
Monsanto is based in Creve Coeur, Missouri, just outside St Louis.