Bayer AG is days away from a transformation into the world’s biggest maker of seeds and agricultural chemicals, saying it plans to close its purchase of Monsanto Co this week.
With all the required regulatory approvals in place, the Leverkusen, Germany-based company plans to close the deal on Thursday, while raising as much as 26 billion euros (US$30.41 billion) in shares and bonds.
Bayer is to retain its name and drop Monsanto’s.
The purchase is part of a multiyear transformation, as Bayer sold off its legacy plastics business and remade itself into a life-science company with roughly half its sales from health and half from agriculture.
It is the third in a series of mega-deals in the industry, following Dow Chemical Co’s merger with DuPont Co and China National Chemical Corp’s (中國化工) takeover of Syngenta AG.
“We are about to close the transaction to soon create a new leader in agriculture,” Bayer chief executive officer Werner Baumann said in prepared comments yesterday.
The deal would double the size of Bayer’s agriculture business.
Bayer shares yesterday rose 0.6 percent to 104 euros at 10am in Frankfurt. The stock has returned 2.8 percent this year, compared with a 1 percent loss in Germany’s benchmark DAX.
Bayer plans to raise 6 billion euros in a rights offering and 20 billion euros from bond sales, it said on Sunday.
The total deal value of US$63 billion reflects Monsanto’s outstanding debt as of Feb. 28.
Under the rights offering, shareholders would be able to buy two new shares for every 23 held at a price of 81 euros, Bayer said.
That is a discount of about 22 percent to the German company’s closing price on Friday.
The offering has been underwritten by a group of 20 banks. Joint global coordinators are Bank of America Merrill Lynch and Credit Suisse Group AG.
Bayer raised a US$56.9 billion loan in October 2016 to support the acquisition, the company said at the time.
To gain approval for the deal from the US Department of Justice, Bayer agreed to sell assets to Germany’s BASF SE.
The divestiture package is worth about US$9 billion, the largest in a US merger-enforcement case, the US government said.
The German company said it submitted about 40 million pages of documents to US and European authorities, nearly enough to reach from Leverkusen to Monsanto’s headquarters in St Louis, Missouri, and back.
The integration is scheduled to start once the BASF sale has been completed, probably about two months from now.
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