With the acquisition of Monsanto we are creating a global leader in agriculture, while reinforcing Bayer as a global innovation-driven Life Science company with leadership positions in a long-term growth industry.
As a combined company, we will be in a better position to help farmers address the significant challenges they face. With a highly talented and responsible global team, we will shape agriculture through breakthrough innovation that benefits farmers, consumers and our planet.
Our combined portfolio will bring together Monsanto’s outstanding seeds and plant traits with Bayer’s strength in chemical and biological crop protection. These capabilities, matched with our expanded digital tools through the Climate platform, as well as agronomic insights, will allow us to develop truly customized solutions that meet the specific needs of our customers.
Pro forma sales of the combined agriculture business amounted to around 20 billion euros in calendar year 2017. This number is already adjusted for the 2.2 billion euros in sales that we had to divest to receive approval for the transaction. In combining Bayer and Monsanto, we are well positioned to benefit from a cyclical upswing in the agriculture market. Additionally, we expect the combined business to generate industry-leading profitability and create substantial value for our shareholders. For Bayer shareholders, we expect a positive contribution to core earnings per share starting in 2019. From 2021 onwards, we expect that contribution to be in the double-digits. As of 2022, we expect net synergies to deliver annual contributions of 1.2 billion U.S. dollars to EBITDA before special items.
The rationale behind this acquisition is grounded in our focus on innovation, growth and long-term investment in the next generation of farming. The combined company will create attractive and exciting opportunities for employees of both companies as they will be at the forefront of innovation in our sector, delivering an enhanced offering and more innovative solutions to farmers.
Once integration commences, the Crop Science division will maintain its global headquarters and Crop Protection business headquarters in Monheim, Germany. The global Seeds & Traits and North American commercial headquarters will be located in St. Louis, Missouri. The combined agriculture business will have an important presence in many other locations throughout the U.S. and around the world.
Bayer has extensive experience in successfully integrating acquisitions from a business, geographic and cultural perspective, and remains committed to its strong culture of innovation, sustainability and social responsibility. Bayer’s approach to integrating the two businesses will include a focused implementation drawing on resources from both entities.
Whether you work in agriculture or not, when it comes to food, we are all consumers. Food is one of the most basic human needs. It brings us together and is at the heart of our most cherished moments. People everywhere want their food to be healthy, safe, affordable and produced in ways that respect local communities and our environment. As a combined company, we will be able to better help the world’s farmers grow more healthy and affordable food in a sustainable manner to, ultimately, help people and our planet thrive.
We are fully aware of the heightened responsibility that a leadership position in agriculture entails. We will continue to further strengthen our commitment in the area of sustainability. As a leader, Bayer is fully committed to upholding the highest ethical and responsibility standards, strengthening access to health and nutrition, and reducing its environmental footprint. We will apply the same rigor to achieving our sustainability targets as we do to our financial targets.
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