Monsanto Stock Surges on Reported Takeover Interest from Bayer, BASF


The stock price of Monsanto Company (NYSE:MON) surged more than 9% to $98.67 per share around 12:23 in the afternoon in New York today. The increase was driven by the report that Bayer AG (ETR:BAYN) is interested in acquiring Monsanto to create the world’s largest supplier of seeds and farm chemicals, according to Bloomberg based on information familiar with the situation.

Bayer held preliminary talks internally regarding Monsanto

Bayer engaged in preliminary discussions internally and with advisers regarding its intention to acquire Monsanto and how to finance a deal including possible sales of assets.

Monsanto has a market value of more than $42 billion based on the latest data from Google Finance. It is the world’s largest seed provider.

The German chemical and pharmaceutical company hasn’t made a final decision. It may decide against an acquisition or pursue other transactions with Monsanto including joint ventures or asset sales, according to the sources.

In March, it was reported that Monsanto explored potential transactions with Bayer including a full combination, selling all or a portion of its crop sciences business and joint ventures.

According to sources, Monsanto said it was not interested in selling itself when the idea of a full takeover was raised by Bayer at the time. The world’s largest seed provider sees itself acquiring another firm.

Monsanto pursued a merger with Syngenta, but failed. Its bid was considered “woefully short” by Syngenta CEO Michael Mack. In February, China National Chemical Corporation agreed to purchase Syngenta AG (ADR) (NYSE:SYT) for $43 billion.

BASF was reportedly exploring a takeover bid

Yesterday, StreetInsider reported that BASF SE (NYSE:BAS) is working with advisers to pursue a takeover bid for Monsanto.

Market observers suggested that BASF will be pressured to consider a proposal to buy the world’s largest seed provider if Bayer would pursue a bid.

The stock price of BASF declined more than 2% to €66.97 per share in Germany on Thursday. The stock price of Bayer also dropped more than 4% to €95.15 per share.