A real revolution is about to arrive in the pharmaceutical world. On Thursday, June 7, Bayer will complete the acquisition of Monsanto, becoming its sole shareholder. Once completed the to merge, the famous US brand, best known for its research into GMOs, will no longer exist. The biotech company's products will be sold under their trademark only.
“The acquisition of Monsanto represents a strategic milestone to strengthen our portfolio of companies leader in the field of health and nutrition. We will double the size of our agricultural business and create a leading innovation engine in agriculture, positioning ourselves to better serve our customers and unlock the long-term growth potential in the sector.” This is the comment of the president of Bayer, he comments Werner Baumann.
After just over two years, therefore, one of the most expensive operations of recent years is completed, the largest by a German company abroad: theThe value of this acquisition is $128 per share, $63 billion. A monstrous amount that will require a 7 billion euro capital increase by the German giant.
The merger had been announced in May 2016 and was received on May 29th the ok of the American Antitrust, the last missing piece before the real "wedding". In March, however, the approval by the EU had arrived. The US authorities, in order to ensure compliance with competition rules, have requested the sale of parts of the company. In detail, the Germans have yielded some business in seeds and some product lines at BASF for 7 billion, while they should shortly implement the downsizing of a part of the digital agriculture business.
A "sacrifice" for a good purpose given that, from this operation, the pharmaceutical chemical company foresees a positive contribution to core earnings per share as early as 2019. From 2021 onwards, however, the benefit should be in double-digit percentage. Additionally, adjusted for divestitures, Bayer expects synergies of $1,2 billion in EBITDA before special items starting in 2022.
“All public approvals required to complete the acquisition are on the table now. Bayer will become sole owner of Monsanto Company on June 7,” reads a note from the German company.
