Werner Baumann (left), CEO of Bayer AG, and Hugh Grant, Chairman and Chief Executive
Officer of Monsanto.
These are expected to result in significant and
lasting benefits for farmers: from improved
sourcing and increased convenience to higher
yield, better environmental protection and
sustainability.
“The agriculture industry is at the heart of one
of the greatest challenges of our time: how to
feed an additional 3 billion people in the
world by 2050 in an environmentally sustainable way. It has been both companies’ belief
that this challenge requires a new approach
that more systematically integrates expertise
across Seeds, Traits and Crop Protection including Biologicals with a deep commitment
to innovation and sustainable agriculture practices,” said Liam Condon, member of the
Board of Management of Bayer AG and head
of the Crop Science Division.
“We are entering a new era in agriculture –
one with significant challenges that demand
new, sustainable solutions and technologies to
enable growers to produce more with less.
This combination with Bayer will deliver just
that – an innovation engine that pairs Bayer’s
crop protection portfolio with our world-class
seeds and traits and digital agriculture tools to
help growers overcome the obstacles of tomorrow. Together Monsanto and Bayer will
build on our proud tradition and respective
track records of innovation in the agriculture
industry, delivering a more comprehensive
and broader set of solutions to growers,” said
Grant.
Value Creation
Pro forma sales of the combined agricultural
business amounted to EUR 23 billion in calendar year 2015. The combined company will be
well positioned to participate in the agricultural industry with significant long-term
growth potential. Beyond the attractive long
term value creation potential of the combination, Bayer expects the transaction to provide
its shareholders with accretion to core EPS
(earnings per share) in the first full year after
closing and a double-digit percentage accretion in the third full year. Bayer has confirmed
sales and cost synergies assumptions in due
diligence and expects annual EBITDA contributions from total synergies of approximately
USD 1.5 billion after year three, plus additional synergies from integrated solutions in future years.