After months of on-again, off-again negotiations, Bayer and Monsanto have agreed to a merger that will create a “leading innovation engine for the next generation of farmers,” officials of the two companies said during a press briefing.

The purchase price was listed at $128 per share, which would give Monsanto a valuation of about $66 billion. They said the share price offer represents a 44 percent premium for Monsanto shareholders, who will decide on the merger in late December or early January.

“Today’s announcement is a testament to everything we’ve achieved and the value that we have created for our stakeholders at Monsanto,” said Monsanto Chairman and CEO Hugh Grant. “We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration.”

Officials for both companies said they will continue on separate paths until the sale closes, which is anticipated in late 2017, but that once that occurs they hope to achieve “synergies” of about $1.5 billion after year three of the process.

They also said they believe Monsanto’s seed and traits and Climate Corporation platforms will be a good fit for Bayer, which has some seed and trait products but has focused more on crop protection chemistries in recent years. Bringing the two companies together could also streamline the development of new herbicide-tolerant traits, they said.

Revolutionary approach

“The combination with Monsanto represents the kind of revolutionary approach to agriculture that will be necessary to sustainably feed the world as we enable growers with a broad set of enhanced agricultural solutions,” said Werner Bauman, CEO of Bayer AG.

“We are creating a company that can offer integrated solutions from seeds and traits to crop protection to digital agriculture that helps farmers manage the increasing global food demand. Immediately, we will double our ability to offer a broader variety of seeds and traits and crop protection products and from the smart combination of products based on agronomic advice.”

Once the merger is completed, the combined companies will have about 10,000 employees working in research and development, said Liam Condon, head of Bayer’s Crop Science Division. The new company will have an annual R&D budget of about EUR $2.5 billion.

“I think you all know we have not developed any new herbicide chemistry in several years,” said Grant, referring to the absence of new herbicide registrations on the world market. “We’re hopeful this combination will enable us to move in new directions.”

“This is a deal that is clearly driven by both companies’ shared vision that innovation is key to farmers,” said Robb Fraley, executive vice president and chief technology officer at Monsanto.