Skip to Content

Monsanto Is Playing Hard to Get in Bayer Merger Talks

U.S. seed company Monsanto rejected a sweetened $125-per-share offer from Bayer, but said it was open to continue talks with the German chemicals group as well as other parties.

Monsanto said on Tuesday its board unanimously viewed Bayer’s latest bid as “financially inadequate and insufficient to ensure deal certainty.”

“Monsanto remains open to continued and constructive conversations with Bayer and other parties to assess whether a transaction that the board believes is in the best interest of Monsanto shareowners can be realized,” the company said.

Bayer had increased its bid by $3 per share last Thursday, making the $125-per-share offer the largest all-cash bid on record. It also offered a $1.5 billion reverse antitrust breakup fee.

Monsanto’s shares fell 1.5 percent to $104.80 in premarket U.S. trading. Bayer shares were down 1 percent at 91.81 euros.

Access to confidential information has been a major sticking point in Bayer’s negotiations with Monsanto ever since the German company offered to acquire Monsanto in May.

Bayer argued last week that it had comprehensively addressed Monsanto’s questions about financing and regulatory matters and said it was prepared to make certain commitments to regulators, if required, to complete a deal.

Reuters reported on Monday that Monsanto would require Bayer to raise its offer further in order to agree to a sale.

The seeds and agrochemicals industry has been jolted by several large deals in the past year as low crop prices and belt-tightening by farmers pressured earnings.

Syngenta, which Monsanto tried to buy last year, agreed in February to be acquired by ChemChina for $43 billion. Dow Chemical and DuPont struck a $130 billion mega merger late last year.

Morgan Stanley and Ducera Partners are Monsanto’s financial advisers and Wachtell, Lipton, Rosen & Katz is its legal adviser.

Up to Monday’s close, Monsanto shares had risen 5.3 percent since Bayer raised its offer on July 14. Bayer shares have fallen about 1 percent in the same period.