Bayer: Bayer bids for Monsanto for USD62bn in an all-cash transaction

Bayer has announced this morning that it is offering USD122 per share to acquire Monsanto in an all-cash offer that values the target at USD62bn. Bayer is expecting to generate USD1.5bn in synergies which will make the acquisition accretive by a mid-single digit percentage in year 1 and double-digit percentage in the subsequent years. The offer is not subject to a financing condition. Bayer intends to finance the acquisition by a rights issue representing about 25% of the total amount and 75% in debt. Due to strong cash-flow generation, Bayer anticipates a long-term A credit rating by agencies. 50% of Bayer’s revenues would then be generated in Crop Science. We put our FV under review.

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