Bayer open to buying 26 percent stake in Monsanto India

Bayer, German chemicals conglomerate, made an open offer to buy 26 per cent in Monsanto India as part of a global deal. The German company is acquiring the US-based seed major Monsanto for 66 billion dollars. The open offer shall be for acquisition of upto 44,88,315 fully paid-up equity shares from public shareholders of Monsanto India. This represents 26 per cent of the fully diluted voting equity share capital of the firm. The offer price has been set at Rs.2,481.60 per share, which is at a 3.43 per cent discount to the company’s closing price yesterday. The managers of the open offer stated that since the offer was being made as a consequence of indirect acquisition of shares, the offer price will be revised according to certain SEBI regulations. It said that the revised price shall be disclosed in an informative public statement. On 14th September, 2016 Bayer had announced its merger plan with Monsanto and KWA Investment Company, an indirect wholly owned subsidiary of the German acquirer. It said that it would acquire 100 per cent of the outstanding shares of common stock, at 0.01 dollars per share. On the other hand, Monsanto’s shareholders would receive 128 dollars per Monsanto share.

Things you need to know about the megadeal:

• Bayer had been courting Monsanto actively for months, however it was only after it raised its bid for the third time that Monsanto finally succumbed. They shook hands on an offer of 128 dollars per share for Monsanto, up from the 122 a share Bayer had initially offered in the month of May, and valuing the US-company at 66 billion dollars.
• The deal took the crown for the largest takeover of the year, dwarfing the 32 billion dollars the Dublin-based pharma group Shire had agreed to pay for US-peer Baxalta in January. It also marks the biggest-ever takeover by a German company.
• Bayer, known for its health products and also a prominent figure in the European agro-industry, wants to stake out a dominant position selling pesticides and seeds to farmers around the globe. The German company said that "innovative" agriculture solutions were needed to feed the world’s 9 billion people by the year 2050, and it hopes to build on Monsanto’s market-leading line in genetically modified crop seeds in the United States.
• There are concerns already that the latest mega-merger in the sector might put too much power in the hands of a few players, pushing up prices for the farmers.

The Bayer-Monsanto deal shall also face strong opposition from the environmental groups, with Friends of Earth tagging it as a "marriage made in hell".

Read more about Monsanto India news Bayer to acquire Monsanto- Impact on Indian Subsidiaries.

A writer by day and a passionate reader by night. Writing just doesn't fill my pocket but it also fills my heart. Passion for writing about new events & happenings is what soothes my mind & soul.