German pharmaceutical company Bayer has made a major move into the chemicals industry with its proposal to acquire American agrochemical company Monsanto for $62bn.
Bayer has made an all-cash offer in a bid to take over all of the issued and outstanding shares of common stock of Monsanto at a value of $122 per share.
With the acquisition, Bayer will be able to reinforce its position as a life science company.
Bayer CEO Werner Baumann said: "We have long respected Monsanto’s business and share their vision to create an integrated business that we believe is capable of generating substantial value for both companies’ shareholders.
"Together we would draw on the collective expertise of both companies to build a leading agriculture player with exceptional innovation capabilities to the benefit of farmers, consumers, our employees and the communities in which we operate."
The deal will bring together major platforms that include crop protection, biologics, seeds and traits and digital farming.
The newly combined business will be able to derive benefits from Monsanto’s leadership in seeds and traits and the pharmaceutical company’s broad crop protection product line across a wide range of indications and crops.
Bayer board of management member and crop science division head Liam Condon said: "Bayer is committed to enabling farmers to sustainably produce enough healthy, safe and affordable food capable of feeding the world’s growing population.
"Faced with the complex challenge of operating in a resource-constrained world with increasing climate volatility, there is a clear need for more innovative solutions that advance the next generation of farming.
"By supporting farmers of all sizes on every continent, the combined business would be positioned as the partner of choice for truly integrated, superior solutions."
The Board of Management, as well as the Supervisory Board of Bayer, has approved the proposal for the acquisition.
The buy-out will be subject to customary closing conditions.