Monsanto chief executive Hugh Grant said an “important milestone” had been passed after the US seed company shareholders overwhelmingly backed its $66bn sale to Bayer ahead of key regulatory reviews. Around 99 percent of Monsanto shareholders backed the deal which is bringing together two of the world’s biggest agriculture companies and marks the biggest takeover by a German company of a US company. Around 75 percent of Monsanto shareholders voted on the deal.
Monsanto investors will receive $128 per share, an amount which some shareholders argue is too low.
Grant said: “We are pleased we received such strong support from our shareholders. This is an important milestone as we work to combine our two complementary companies and deliver on our shared vision for the future of agriculture.”
“By bringing together our expertise and our resources to drive this shared vision, we can do even more together to benefit growers around the world and to help address broad global challenges like climate change and food scarcity.”
“The acquisition of Monsanto is driven by our strong belief that this combination can help address the growing challenges facing farmers and the overall agriculture industry today and in the future,” said Werner Baumann, CEO of Bayer.
“Together, Bayer and Monsanto will be able to offer the new, innovative solutions that our customers need. We look forward to completing the transaction and working closely with Monsanto to ensure a successful integration.”
However, the deal, which will now face scrutiny by regulators, has faced significant criticizm. This has been focused on the fact that the new company would wield too much power and push prices up for farmers and consumers.
The National Farmers Union and the Natural Resources Defense Council have urged the US Department of Justice to reject the deal.
However, officials from Monsanto and Bayer insist that the deal will be a boost for farmers and the agrochemical sector.
The deal also comes amid the arrival of Donald Trump as US president, who has been critical of big corporate deals concentrating excessive power within one company.
For example, Trump has said he opposes the $85 billion merger between AT&T and Time Warner, arguing the major media deal would result in “too much concentration of power” and before being elected vowed to undo the deal.
However, it is not the president who directly rules if a deal is legal, as that is down to the US Justice Department of Federal Commission, which must convince a judge to approve its judgement.
Bayer’s purchase of Monsanto, announced in September this year, forms a company with a diverse portfolio making products such as Aspirin, Alka-Seltzer and crop genetics and a range of agricultural products.
It would mean that Bayer is likely tie-up its crop science franchise with Monsanto’s biotechnology and seed products, including its chemical spray Roundup.
According to Morgan Stanley, the combined entity would control around 28 percent of the world's pesticides and 36 percent of US corn seeds.
Monsanto and Bayer hope to have the deal wrapped up the end of 2017.
The agrochemical sector is undergoing major consolidation, with ChemChina buying Syngenta, which Monsanto previously tried to buy, while Dow Chemical is to merge with DuPont.
