Bayer in talks with Monsanto to create agriculture giant

Monsanto, with a market value of $42 billion, said it’s reviewing the offer in a statement today.
Monsanto, with a market value of $42 billion, said it’s reviewing the offer in a statement today.

Drugs and chemicals group Bayer has made a takeover proposal to U.S. seeds company Monsanto, aiming to create the world's biggest agricultural supplier of seeds and pesticides.

Monsanto, with a market value of $42 billion, said it’s reviewing the offer in a statement today.

"There is no assurance that any transaction will be entered into or consummated, or on what terms," they said in a statement.

It added there would be "no further comment" until the board of directors completed its review of the proposal.

"Bayer executives recently met with executives of Monsanto to privately discuss a negotiated acquisition of Monsanto Company," the Bayer said in a statement.

Bayer shares were the biggest losers on the blue-chip DAX 30 index in Frankfurt following the announcement, plunging 7pc to an intraday low of €89.65 in an overall market down by around 1pc.

At present, agriculture accounts for about 22 percent of the German company’s revenue.

The industry has seen two big merger deals recently, which are still undergoing regulatory reviews in the United States.

The approach comes as the agriculture sector faces heavy pressure after three years of falling crop prices, which is slashing US farmers' income.

Monsanto in May cut its profit forecast for the year and said it is eliminating about 16% of its employees.

Shares in the company have slipped 1.4 percent so far this year, closing on Wednesday at $97.13.

Switzerland's Syngenta last year rejected an unsolicited offer from Monsanto, later agreeing to be bought by China National Chemical Corp for $43 billion.