Germany-based health and agricultural giant Bayer reached a deal to acquire seed and pesticide firm Monsanto for $66 billion in yet another jolt to a global agricultural sector that has been rocked by sluggish crop prices.
Bayer said Wednesday that it agreed to pay $128 per share in cash for St. Louis-based Monsanto after months of acquisition talks in which the pursuer sweetened its bid on multiple occasions.
Following a flurry of major deals in the ag sector, such as the tie-up of ag giants Dow Chemical and DuPont, regulatory scrutiny from the Obama administration and other governments could prove to be an obstacle for the Bayer-Monsanto accord.
But Bayer agreed to pay $2 billion if the deal collapses under anti-trust pressure, in what investors call a breakup fee. Bayer, which is financing the deal with a combination of its cash reserves and new debt, described the fee as reflective of “its confidence that it will obtain the necessary regulatory approvals.”