Bayer AG (BAYRY Quick QuoteBAYRY - Free Report) announced that it will acquire all issued and outstanding shares of the common stock of Monsanto Company at $122 per share in an aggregate all-cash offer worth $62 billion.

The company will use a combination of debt and equity to finance the transaction. Equity, which represents approximately 25% of the deal value, will be raised primarily via a rights offering.

The combined business is expected to provide accretion to Bayer’s core earnings in the mid-single-digit percentage in the first full year of the closing of the transaction, followed by double-digit percentage growth thereafter. Moreover, Bayer expects annual earnings contributions of around $1.5 billion from synergies after three years, as well as additional future benefits from integrated offerings.

The transaction is expected to bring together leading platforms like Seeds & Traits, Crop Protection, Biologics, and Digital Farming. The combined business will benefit from Monsanto’s Seeds & Traits and Bayer’s Crop Protection products across a comprehensive range of indications and crops. The transaction will also create attractive opportunities for the employees of both companies.

We remind investors that last week, Monsanto disclosed that it had received an unsolicited, non-binding proposal from Bayer for a potential acquisition, subject to due diligence, regulatory approvals and other conditions.

Currently, both Bayer and Monsanto carry a Zacks Rank #3 (Hold). A couple of better-ranked stock in the health care sector are Bristol-Myers Squibb Company (BMY Quick QuoteBMY - Free Report) and Pfizer Inc. (PFE Quick QuotePFE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).

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