London, May 23: Bayer of Germany said on Monday that it had offered $62 billion in cash to acquire Monsanto in a deal that would combine two of the world's biggest companies in the businesses of crop seeds and pesticides.

The transaction, if consummated, would create an industry giant whose products include antibiotics, genetically modified crops and pesticides. It would have a combined annual revenue of more than $67 billion.

Bayer said it decided to make details of its proposal public after market speculation and investor inquiries about a potential deal.

The companies confirmed last week that Bayer had approached Monsanto about a potential tie-up. Monsanto said then its board of directors was reviewing the proposal.

Bayer said it would be willing to pay $122 a share for Monsanto, representing a 37 per cent premium to Monsanto's closing price on May 9, the day before Bayer made its proposal.

"We have long respected Monsanto's business and share their vision to create an integrated business that we believe is capable of generating substantial value for both companies' shareholders," Werner Baumann, the Bayer chief executive, said in a news release.

"Together we would draw on the collective expertise of both companies to build a leading agriculture player with exceptional innovation capabilities to the benefit of farmers, consumers, our employees and the communities in which we operate."

The combined company's seeds business and North American headquarters would be in St. Louis, where Monsanto is based. The company's pesticides and crop science business would be based in Monheim, Germany.

Bayer said it expected to achieve annual cost savings of about $1.5 billion after three years if the two companies were combined.

Bayer said it intends to finance the transaction with debt and equity and is "confident" in its ability to do so after advanced discussions with its lenders, Bank of America Merrill Lynch and Credit Suisse.

The German company said its supervisory and management boards had unanimously approved the proposal and were "fully committed" to the transaction.

The proposal came after Dow Chemical and DuPont agreed to merge last year and Monsanto made an unsuccessful bid to acquire Syngenta, a Swiss pesticide maker.

Monsanto offered to pay about $47 billion for Syngenta, but the Swiss company repeatedly rejected its approaches, saying the offer was too low and that such a deal would have trouble winning regulatory approval.

Syngenta agreed in February to be acquired by China National Chemical Corporation.

Local operations

Monsanto has three entities in India -- Monsanto India Ltd (MIL), Monsanto Holdings Pvt Ltd (MHPL) and JV firm Mahyco Monsanto Biotech India Ltd (MMBL) with a staff strength of more than 1,000.

MIL is listed and had posted an annual turnover of Rs 580 crore during the last financial year. In India, Monsanto sells hybrids seeds and herbicides through MIL and MHPL.

MMBL, which is a 50:50 joint venture between MHPL and Mahyco, sells Bollgard range of technologies to cotton seed firms.

Separately, MHPL holds 26 per cent in seed company Mahyco. Bayer CropScience, a listed entity in India, had posted a turnover of Rs 3,818.6 crore last fiscal.

NY TIMES NEWS SERVICE & PTI