Monsanto Company (MON, Financial) has been steadily rising since the announcement that its $62.5 billlion merger with Bayer (BAYA) will close soon.
Bayer CEO Werner Baumann said the deal will be completed by mid-June. Monsanto is expected to give a significant contribution to Bayer’s core net profit starting in 2019 and to its adjusted earnings before interest taxes depreciation and amortization’s (EBITDA).
On Monday, Monsanto was trading at over $127 per share, up 0.51%, reaching its 52-week high.
At the annual meeting of Bayer shareholders, Baumann said that “the company expects synergies to deliver annual contributions of $1.2 billion U.S. dollars to EBITDA before special items from 2022 onward”.
The acquisition will be a boost in value for shareholders and customers at both companies. Monsanto is 8% up so far this year. Bayer A.G. has fallen 5% to $29.50 per ADR.
Monsanto has a market capitalization of $55.82 billion, a price-book ratio of 7.2 times versus an industry median of 1.89 times, a price-sales ratio of 3.86 times versus an industry median of 1.39 times and a price-earnings ratio of 22.67 times versus an industry average of 22.87 times.
Monsanto has a forward dividend of $2.16 per share, yielding 1.72%. The stock in Monsanto has a recommendation rating of 2.9 out of 5 and an average target price of $126.40 per share.
Bayer has a market capitalization of $102.54 billion, a price-book ratio of 2.28 times versus an industry median of 2.96 times, a price-sales ratio of 2.34 times versus an industry median of 3.25 times and a price-earnings ratio of 12.34 times versus an industry average of 26.44 times.
Bayer has a forward dividend of 86 cents, which yields 2.81%.
Regarding its takeover of Monsanto, Bayer has reached an agreement with U.S. antitrust regulators. Bayer will sell BASF $9 billion in agriculture assets to allow Monsanto purchase. It is reported as the largest antitrust divesture in history.
(Disclosure: I have no positions in any security mentioned in this article.)
