The world’s biggest fertilizer and seeds company is now making a bid for an even larger and grand bid, to buy out the competition and rival Monsanto. Bayer is a German based firm that is the largest in the world when it comes to agrarian equipment and fertilizers. On the other hand, Monsanto is one of the world’s largest seed manufacturer that has its operations set up in over 100 countries across the world.
The agricultural seeds giant has made its move and acquired major competition across the world. However, this time, the play seems to be on the acquisition of Monsanto. The American based Monsanto, has been actively looking for acquisition investment and has also made the knowledge public.
Rejection of initial offer
Bayer AG has pitched in with an initial offer to acquire Monsanto for a substantial amount of 62 billion dollars. However, the offer made by Bayer to Monsanto seemed to be too low, as Monsanto rejected the proposal asking for a revision in the offer price. With acquisitions of such scale, there is obviously a certain amount of time required to revise the offer. Bayer has now vouched to raise an additional 40 billion dollars to arrange for the acquisition of Monsanto.
Market insiders claim that the acquisition amount was hugely mistaken and undervalued, which led to the breaking down of the talks. Bayer AG did not comment on the situation, but many unofficial sources from within the company itself claimed that the company is still persistent on the deal, and would ensure that they would be able to raise the required amount of funds in a short duration of time before they could make a counter-offer. There are still, however, many prospectors who are looking to clench the deal.
Back to the drawing board
The sheer scale of the operation would make the Bayer AG acquisition of Monsanto the largest German acquisition amount ever paid, if the deal works out. Bayer AG will now be approaching several other investment banks and regular banks in order to secure business loans and raise capital through additional company lending in order to raise the required capital for the acquisition. Amongst the army of investment advisors, Bank of America, and Credit Suisse group are the main investment advisors, while the Rothschild group is also an added advisor to Bayer AG for the acquisition.