May 23, 2016 - 13:52 AMT
PanARMENIAN.Net - German pharmaceuticals giant Bayer on Monday, May 23 said it had offered $62 billion for U.S. agriculture group Monsanto in a move which would create the world's biggest supplier of seeds, pesticides and genetically-modified crops, AFP reports.
Bayer said it had made an "all-cash offer" for the US giant at $122 per share or a total of $62 billion (55 billion euros).
"The planned combination with Monsanto is such an extraordinary opportunity to create a global leader in the agricultural industry. Monsanto is a perfect match to our agricultural business," the German firm said.
Bayer said expected synergies from the merger would result in an annual boost to earnings of around $1.5 billion after three years, AFP says.
The announcement comes just days after Monsanto said it had received an unsolicited bid from Bayer following weeks of speculation about a possible tie-up.
According to the Wall Street Journal, the two companies would together account for around 28 percent of global sales of pesticides and herbicides.
Low commodity prices -- which have caused farmers to cut orders for supplies -- have piled the pressure on agricultural suppliers like Monsanto, which is based in Saint Louis, Missouri.
In March, the U.S. firm slashed its earnings forecast for 2016, AFP says.
Sluggishness in the industry has also sparked consolidation deals such as a mega-merger between DuPont and Dow Chemical.