A twin photograph of Bayer's sign next to Monsanto's sign© DD PUSA/REX/Shutterstock

German chemical and pharmaceutical giant Bayer has acquired US firm Monsanto for $66bn (£50bn).

The agreement equates to US$128 (£96.91) per share – a 2% increase on the previous offer. Monsanto, had previously rejected a world record, all-cash bid of $62bn (£43bn) in May as “inadequate”. But the new offer represents a 44% increase on the May share price and shareholders unanimously approved the merger.

The deal creates the world’s biggest supplier of pesticides and seeds. The combined sales for the agricultural businesses amounted to €23bn (£19.6bn) in 2015.

See also: Monsanto drops hostile bid for Syngenta

And the merger means the companies have access to a combined R&D budget of €2.5bn (£2.12bn).

Bayer intends to finance the transaction with a combination of debt and equity.

The equity component of approximately US$19bn (£14.5bn) is expected to be raised through an issue of mandatory convertible bonds and through a rights issue with subscription rights.

Bridge financing for US$57bn (£43bn) has been committed by BofA Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan.

Headquarters

The combined agriculture business will have its global seeds & traits and North American commercial headquarters in St Louis, Missouri.

Its global crop protection and overall crop science headquarters will be located in Monheim, Germany.

If the proposed $130bn (£97.2bn) Dow/DuPont and $44bn (£32.2bn) ChemChina/Syngenta mega-mergers go ahead it means three companies could control 75% of the world’s agrochemicals.

Farmers have expressed concerns that such a concentration of ownership would lead to fewer product and seed choices and higher input prices.

However, a Bayer spokesperson said the merger would increase its product portfolio.

“The combined business would benefit from a combined R&D pipeline that would deliver valuable and innovative solutions,” the spokesperson said.

“The planned combination with Monsanto is such an extraordinary opportunity to create a global leader in the agricultural industry.”

‘Marraige made in hell’

But green campaigners Friends of the Earth Europe described the Bayer-Monsanto takeover as a “marriage made in hell”.

Adrian Bebb, FoE’s senior food and farming campaigner, said: “Bayer’s buyout of Monsanto threatens to further lock in industrialised agriculture at the expense of nature, farmers and the wider public.

“While public support for local and greener food continues to boom, this mega corporation will be doing its best to force damaging pesticides and GM seeds into our countryside.”