Bayer completes $66bn Monsanto takeover with biggest cash deal in corporate history

Chemical and pharmaceutical company Bayer has completed the acquisition of US seed-maker Monsanto for approximately $66bn (£50bn), finalising the largest cash deal in corporate history.

The US firm has accepted a $128 per share offer from the Aspirin producer, in what represents the biggest all-cash deal in history. It will form the world's biggest seed and pesticide company, giving it control of more than 25% of the sector.

Under the terms of the agreement, Bayer has offered a $2bn break fee, should the deal not be completed.

The two companies had been locked in negotiations for months, with the Germany-based firm first offering to pay $122 per Monsanto share in May, before eventually raising the price to $125 in July and to $127.50 about a week ago.

Werner Baumann, chief executive of Bayer, said the takeover would bring benefits across the board and deliver "substantial value to shareholders, our customers, employees and society at large".

Farmers have voiced concerns over the deal, as it could lead to higher prices. Professor John Colley of Warwick Business School said the merger could be a horror story for both Bayer and its customers.

"Apart from Monsanto's shareholders, who have hit the jackpot, this looks like a lose-lose bid. Bayer have been forced into paying too much and face major integration and competition authority risks," he explained.

"By the time the competition authorities have finished with their demands Bayer may regret setting a German record. The farmers will lose out as product ranges are rationalised and attempts are made to increase prices. Bayer may have won the bid now, but could regret the move at their leisure. Baumann may be cursing his luck. Bayer's shareholders may be cursing him.

The merger is the latest high-value deal in the fast-consolidating farm supplies sector, after last month Chinese state-owned ChemChina agreed to acquire Swiss agribusiness Syngenta for $43bn, while, earlier this year, US-based firms Dow Chemical and DuPont completed a $130bn merger.