Monsanto shareholders voted to approve the agribusiness company’s acquisition by Bayer AG at a special meeting Tuesday morning.
Creve Coeur-based Monsanto reported that approximately 99 percent of votes cast supported the sale to the German pharmaceutical company, which was originally announced in September.
The vote assures shareholders of receiving $128 per share upon completion of the merger. Including debt, the acquisition is valued at about $66 billion.
“This is a really significant milestone” said Monsanto’s chairman and chief executive officer, Hugh Grant, following the meeting. “When you get 99 percent affirmation, that’s very encouraging.”
Executives from both companies have touted the merger as a way to provide farmers with an improved innovation pipeline needed to address agricultural issues ranging from climate change to food scarcity.
“The test will be: Did we produce better products faster?” Grant said. “Did we help them lift yields?”
While acknowledging that “price is always important,” Grant said he believes the complementary nature of the two companies ultimately helped garner support among shareholders.
“It’s about bringing bright people together,” Grant said. “Combining the two companies unlocks a whole new level of resourcing.”
While many wonder what those combined resources will mean for the new company’s presence in St. Louis, Grant said ongoing talks with Bayer reassured him that the region would retain its stature as a biotech hub going forward.
“The more we interact and the more we talk, the better we feel about that,” Grant said. “St. Louis will become the global headquarters for all the work on seeds and biotechnology.”
The deal is projected to close by the end of 2017 and needs to be approved by antitrust regulators. Grant said Bayer has made regulatory filings in the U.S. and intends to do so in Europe in early 2017. Brazil, India and China represent other key markets where the deal must be upheld, Grant said.
He expressed confidence that the proposed merger would hold up in all jurisdictions, given the differences between the two companies.
“The overlap between the two is really quite small,” Grant said.
Others, however, have argued that a merger would consolidate too much market share within one company.
“The existence of such a powerful player would substantially harm both farmers and the environment by decreasing competition and innovation, resulting in increased costs, and allowing for greater corporate control over farmers’ planting choice,” the Natural Resources Defense Council, an environmental organization, said in a statement.
The organization filed a letter with the U.S. Department of Justice opposing the measure.
With Bayer as a leading pesticide manufacturer, NRDC also voiced concern that the move reinforces “chemical-intensive growing practices” harmful to the environment, and especially pollinators, such as bees.
Monsanto shares fell 7 cents to close at $104.52.
In a U.S. Securities and Exchange Commission filing, Monsanto indicated that “the merger does not require approval by Bayer’s shareholders.”