Monsanto Shareholders OK Merger

Monsanto Stockholders Overwhelmingly Vote to Become Part of Bayer AG

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Combined agricultural sales last year of Bayer and Monsanto equaled roughly $25.8 billion. (Logos courtesy of Bayer and Monsanto)

OMAHA (DTN) -- Shareholders for Monsanto Co. officially voted Tuesday at a special meeting to approve the merger with a wholly-owned subsidiary of Bayer Aktiengesellschaft.

In a news release, Monsanto stated that its shareowners will receive $128 per share in cash at the closing of the merger. Approximately 75% of all outstanding Monsanto shares sent in votes and 99% of those cast votes to back the merger, the company stated.

When the deal was first announced earlier this fall, Monsanto had 442 million outstanding shares. The $128-a-share deal equates to $56.6 billion in cash for shareholders, but Monsanto also reported $9.3 billion in debt. That puts the deal value at just under $66 billion.

"We are pleased we received such strong support from our shareowners," said Hugh Grant, Monsanto's chairman and CEO. "This is an important milestone as we work to combine our two complementary companies and deliver on our shared vision for the future of agriculture. By bringing together our expertise and our resources to drive this shared vision, we can do even more together to benefit growers around the world and to help address broad global challenges like climate change and food scarcity."

Werner Baumann, CEO of Bayer AG, said the acquisition of Monsanto is driven by a strong belief that the combined company would help address the growing challenges facing farmers and the overall agriculture industry. "Together, Bayer and Monsanto will be able to offer the new, innovative solutions that our customers need. We look forward to completing the transaction and working closely with Monsanto to ensure a successful integration."

Bayer operates in several industries, but Monsanto is largely an agricultural company. Combined agricultural sales last year from the two companies equaled roughly $25.8 billion. When the merger was announced, Bayer also cited that once the transaction is completed and the two companies merge, it would also generate roughly $1.5 billion in costs savings over three years.

The merger still has to go through regulatory approval in the U.S. under different jurisdictions, including the Department of Justice anti-trust division and the Committee on Foreign Investment in the United States (CFIUS) since Bayer is based in Germany. The European Union also has to approve the deal. Company officials stated in the news release they expect the merger will be completed by the end of 2017.

Monsanto shareowners also accepted the proposal to approve, on a non-binding basis, more compensation that may be paid or become payable to the company's named executive officers in connection with the merger.

The Monsanto-Bayer deal is just one of three major mergers in the global seed-and-chemical industries. Dow and DuPont announced their merger about a year ago, then ChemChina announced it was buying Syngenta.

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Chris Clayton