Bayer, Monsanto said to be closer to deal: Sources

NEW YORK: Negotiations between Bayer AG and Monsanto Co are advancing toward a deal after the companies made progress on issues including the purchase price and termination fee, people familiar with the matter said.

Bayer chief executive officer Werner Baumann and his US counterpart Hugh Grant have had a series of constructive meetings in recent weeks, said the people, who asked not to be identified because the discussions are private. The companies, in talks to create the world’s largest producer of seeds and pesticides, could reach an agreement in the next two weeks, said the people, who cautioned that negotiations could still fall apart or be delayed.

Leverkusen, Germany-based Bayer has been examining Monsanto’s financial accounts as it weighs a new offer, people familiar with the matter said earlier this month. Monsanto in July rejected Bayer’s improved $55 billion bid, describing the $125-ashare proposal as “financially inadequate”.

An agreement would end months of back-and-forth that followed Bayer’s initial offer in May. Representatives for Bayer and St Louis-based Monsanto declined to comment.

Shares of Monsanto, which has a market value of about $46 billion, rose 4.1% to $108.75 in pre-market trading in New York. Bayer shares gained 0.3% to 96.13 euros as of 1:06 p.m. in Frankfurt, valuing the company at about $90 billion.

The global agricultural industry is being reshaped as farmers, hurt by lower commodity prices, spend less, pushing seed and chemical makers to consolidate.