Bayer makes offer for Monsanto India stake

In the open offer, Bayer will acquire up to 44,88,315 shares of Monsanto India Ltd from public shareholders at a price of Rs2,481.60 apiece


Monsanto group holds 72.14% stake in the Monsanto India Ltd as on 30 June, 2016, according to regulatory filing. Photo: Reuters
Monsanto group holds 72.14% stake in the Monsanto India Ltd as on 30 June, 2016, according to regulatory filing. Photo: Reuters

New Delhi: German pharmaceutical and chemicals maker Bayer AG on Tuesday launched a mandatory open offer to buy up to 26% additional stake in Monsanto India for more than Rs.1,100 crore, as per a stock exchange filing.

Bayer said it will buy up to 4,488,315 equity shares of Monsanto India from public shareholders at Rs.2,481.60 each, 4% above its Tuesday closing price of Rs.2,390 on the BSE.

Bayer, maker of Aspirin, Alka-Seltzer, Claritin, Coppertone sunscreen and Xarelto, last week said it will buy US-based seed conglomerate Monsanto Co. for $66 billion.

The deal is one of the largest takeover bids by a German company and the biggest all-cash acquisition offer on record.

Once the deal is completed, Bayer will be indirectly acquiring the 72.14% voting share capital of Monsanto India, triggering the open offer.

As on 30 June, the Monsanto group, the world’s biggest manufacturer of genetically modified crop seeds, holds 72.14% stake in Monsanto India, according to a regulatory filing.

The deal, expected to close by the end of 2017, marked a major consolidation in the global seeds business. Recently, Monsanto’s rival Syngenta was acquired by China’s state-owned firm ChemChina.

DSP Merrill Lynch and Credit Suisse Securities (India) Pvt. Ltd will be managing the open offer on behalf of the Bayer group.

Bayer and Monsanto have been operating in India for some time. While Monsanto India focuses on Bt cotton, maize and agri products, Bayer CropScience sells seeds, crop protection and non-agricultural pest-control products.

Monsanto operates through three entities in India—Monsanto India, Monsanto Holdings Pvt. Ltd and JV firm Mahyco Monsanto Biotech India, employing over 1,000 people.

Bayer had revised its offer multiple times before it finally closed the deal. It first offered $122 per share, which was subsequently raised to $125 and then $127.50. The deal was finally clinched at $128 a share, worth about $66 billion, including debt.

The merger is expected to go through intense and lengthy regulatory approval processes across several countries, including the US, Brazil and Canada as well as the EU.

It also has to be approved by Indian authorities, including the Competition Commission of India and stock exchanges.

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