German drugs and chemicals group Bayer says it’s willing to shell out $62 billion for U.S. seed giant Monsanto.
That would make any tie-up between the two companies the top merger so far this year.
Monsanto, the world’s largest seed seller, disclosed last week that it has received an unsolicited approach from Bayer, but it did not reveal the proposed financial terms. Bayer went public with its plan Monday, saying it had made the all-cash offer on May 10.
The $122 per share bid represents a hefty 37% premium over Monsanto’s closing price on May 9, before takeover rumors began to circulate.
Bayer, which is strongest in Asia and Europe, stands to gain from Monsanto’s expertise in agriculture and seeds. It would also benefit from Monsanto’s regional strength in North America.
Bayer said the combined company — which would would span pharmaceuticals, consumer health products, agriculture and pesticides — would generate synergies of $1.5 billion over three years.
A deal between the two, which would require regulatory approval, would be the latest example of consolidation in the agribusiness and chemical sectors. Last year, Dow and DuPont combined to form a new industrial titan worth $130 billion.
If completed at $122 per share, the takeover would also be the biggest announced worldwide in 2016, according to Dealogic.
ChemChina’s $43 billion bid to buy Syngenta, announced in February, currently holds the top spot.
Bayer said it intends to finance the transaction with a combination of debt and equity.