Monsanto Agrees To Be Bought By Bayer For 21% Premium

By Tomi KilgoreMarketsMarketWatch Pulse

Monsanto Co. agreed Wednesday to be acquired by Germany's Bayer AG , after a drawn-out process, in a deal that values the agricultural products company at about $56 billion. Under terms of the deal, Bayer will pay $128 a share in cash for each Monsanto share outstanding, which is 21% above Tuesday's closing price, and 44% above the closing price on May 9, the day before Bayer's initial written buyout proposal. Bayer said it expects the acquisition to add to core earnings in the first full year after the closing. Total synergies are expected to be about $1.5 billion after the third year. The companies expect regulatory approvals for the deal by the end of 2017. Bayer has committed a $2 billion reverse antitrust break-up fee. Monsanto's stock, which tacked on 0.6% in premarket trade, has climbed 7.7% year to date through Tuesday, while the S&P 500 has gained 4.1%.

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