The GM crops pioneer Monsanto has rejected a $62bn (£42.4bn) takeover bid by the German drug and chemicals firm Bayer, saying it is too low but expressing a willingness to consider further talks on a merger.
The chairman and chief executive, Hugh Grant, said the offer significantly undervalued the US agribusiness giant and failed to give enough assurance on how the deal would be financed or overcome possible regulatory challenges.
He said the Monsanto board unanimously regarded the proposal as “incomplete and financially inadequate, but is open to continued and constructive conversations to assess whether a transaction in the best interest of Monsanto shareowners can be achieved”.
Bayer made the $122-a-share cash bid, the largest-ever takeover offer by a German company, on Monday. It pushed up Monsanto shares but only to $106 amid expectations of a rejection and questions over whether Bayer would increase the bid. Bayer shares had tumbled on the news.
Global agrochemicals companies are racing to consolidate, partly in response to a drop in commodity prices that has hit farm incomes. Seed and pesticide markets are also increasingly converging.
ChemChina plans to buy Syngenta for $43bn, after the Swiss company rejected a bid from Monsanto. Dow Chemical is forging a $130bn business with DuPont.
With the German rival BASF SE having previously considered a tie-up with Monsanto, Bayer has moved to avoid being left behind.