Ongoing Merger Between Bayer and Monsanto to Close at $62.5 BN

German pharmaceutical company Bayer has announced that its ongoing deal with American agricultural biotech company Monsanto is expected to close later this week for $62.5 billion. The German company announced in a statement that all approvals required from regulatory agencies have been received by the company.

Bayer also announced that Monsanto will not be using its company name anymore and will be operating under the name Bayer, following the completion of the deal and the takeover. Current products under Monsanto as well as their brand names will be retained and is set to become a part of Bayer’s portfolio.

The German company also announced that it is planning to raise around $30 billion or 26 billion euros worth of bonds and shares as the company closes the deal this coming Thursday following the finalization of regulatory approvals.

Monsanto-Bayer Agreement

The deal between the two companies which started last 2016 has faced objections from the European Union which stated that the merger would damage competition. Bayer also faced a number of objections in the United States which were resolved when Bayer agreed to sell assets to BASF SE with a divestiture package worth $9 billion. The merger received an approval from the  European Union last March allowing the company to buy 5.9 billion worth of seed and herbicide assets.

The negotiations began with an upbeat outlook for Monsanto with the two companies initially coming up with an agreement to sell Monsanto shares for $128 per share to a total of $66 billion. The current offering by the company would allow existing shareholders to buy two new shares for each 23 at a price of 81 euros giving them a 22% discount to Bayer’s closing price last June 1.

Bayer sold its previous business and transitioned into a science company with fifty-percent of its sales coming from its health department while the other fifty percent is derived from agriculture. The company raised a loan of almost $57 billion last year in preparation for the acquisition.

The amount represented a growth of 44% compared to their stock price last May of 2016. Over the past year, Monsanto has posted a rise in their sales coming from corn and soybean seeds. The company also delivered a better than expected earnings report that raised the positive outlook on the company and its upcoming merger with Bayer.

The merger which was highly publicized since 2016 faced a number of issues including Monsanto’s Indianapolis tax break being dropped by the local government. Reports revealed that one of the company’s plans posed a possible threat to the area’s environment.

See also: EU Approves Bayer-Monsanto Takeover

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