Monsanto India, Bayer CropScience rose 2.52% and 3.14% respectively at 10:46 IST on BSE after the global parents of these two firms signed a definitive merger agreement for Bayer's acquisition of Monsanto for $128 per share in an all-cash transaction
Bayer CropScience was up 3.14% at Rs 4,240. Bayer AG is a parent firm of Bayer CropScience. It held 68.57% stake in Bayer CropScience as on 30 June 2016.
Monsanto India was up 2.52% at Rs 2,637. Monsanto Company is a parent firm of Monsanto India. It held 72.14% stake in Monsanto India as on 30 June 2016.
Meanwhile, the S&P BSE Sensex was down 9.20 points or 0.03% at 28,363.03.
Monsanto's board of directors, Bayer's board of management and Bayer's supervisory board unanimously approved the merger agreement. Based on Monsanto's closing share price on 9 May 2016, the day before Bayer's first written proposal to Monsanto, the offer represents a premium of 44% to that price.
Bayer intends to finance the transaction with a combination of debt and equity. The equity component of about $19 billion is expected to be raised through an issuance of mandatory convertible bonds and through a rights issue with subscription rights. Bridge financing for $57 billion is committed by BofA Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan.
The acquisition is subject to customary closing conditions, including Monsanto shareholder approval of the merger agreement and receipt of required regulatory approvals. Closing is expected by the end of 2017.
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Monsanto India is a seed company focusing on maize and agricultural productivity. The company's net profit fell 9.9% to Rs 56.60 crore on 9.1% decline in net sales to Rs 236.08 crore in Q1 June 2016 over Q1 June 2015.
Bayer CropScience has presence in seeds, crop protection and non-agricultural pest control. It is organized into operating units viz. crop protection, seeds and environmental science. The company's net profit rose 18.6% to Rs 131.20 crore on 8.4% growth in net sales to Rs 799.20 crore in Q1 June 2016 over Q1 June 2015.
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