NEW YORK — Monsanto rejected Bayer’s $62 billion takeover bid, calling it “incomplete and financially inadequate.”
However, the seed and weed killer company, which operates a plant in St. Charles Parish, suggested Tuesday that a higher bid might be accepted, saying it remains open to talks. Bayer replied it is committed to completing the deal.
Monsanto Co. Chairman and CEO Hugh Grant also said in a written statement that the initial offer failed to address potential financing and regulatory risks.
Bayer AG, a German drug and chemicals company, made an all-cash bid that valued Monsanto’s stock at $122 each. The company previously said it planned to finance the acquisition with a combination of debt and equity, the latter to be raised largely by issuing new shares.
The company said late Tuesday it is confident it can address any potential financing or regulatory issues related to the proposed deal.
A combination of the two businesses would create a giant seed and farm chemical company with a strong presence in the U.S., Europe and Asia. Both companies are familiar brands on farms around the globe. Bayer’s farm business produces seeds as well as compounds to kill weeds, bugs and fungus. Monsanto, based in St. Louis, produces seeds for fruits, vegetables and other crops including corn, soybeans and cotton, as well as the popular weed killer Roundup.
Monsanto’s Luling operations employ about 645 workers. The company last month announced a $975 million investment over the next three years at the plant to support the launch of its Roundup Ready Xtend Crop System. The expansion will create 95 jobs and 20 new contractor jobs.
Monsanto shares closed regular trading up 3.1 percent at $109.30 and gained another 1.5 percent in after-hours trading, rising to $111.
After 2015’s blistering global buyout pace, 2016 is shaping up to be a sequel. There has been more than $494 billion in global deals already in 2016, the third highest on record, and 2016 is just behind 2015 so far.
The same drivers from 2015 exist this year. Mergers beget mergers, so when two companies in a sector combine, their competitors seek to do the same in order to compete. Low interest rates that make borrowing cheap, huge stockpiles of cash held by corporations and a lackluster environment for organic growth continues to push global mergers.