NEW YORK (TheStreet) -- Shares of Monsanto (MON) were increasing in pre-market trading on Wednesday as the St. Louis-based agricultural products supplier today agreed to be bought by German chemical and pharmaceutical company Bayer (BAYRY) for $66 billion in cash, or $128 per share.
Bayer will finance the deal using a combination of debt and equity, the company said in a statement. The deal still requires approval from regulatory agencies and Monsanto's shareholders.
"This represents a major step forward for our Crop Science business and reinforces Bayer's leadership position as a global innovation driven Life Science company with leadership positions in its core segments...," said Bayer CEO Werner Baumann in a statement.
As of last week, Bayer upped its offer for the third time to $127.50 per share, or $65 billion.
The deal marks the largest acquisition so far this year and the largest cash bid on record, according to Reuters. The combined company will represent the biggest maker of seeds and pesticides in the world.
Regulators are likely to scrutinize the tie-up closely, Reuters notes.
As part of the transaction, Bayer will pay Monsanto a break-up fee of $2 billion should the deal not receive regulatory approval.
The two companies expect the deal to close at the end of 2017.
Bayer stock was flat in pre-market trading on Wednesday.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate MONSANTO CO as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.You can view the full analysis from the report here: MON