By Christopher Alessi
FRANKFURT — Bayer AG Chief Executive Werner Baumann just pulled off the deal of his career.
Now, less than five months in as CEO, his career could hinge on his ability to close the $ 57 billion acquisition of Monsanto Co. agreed Wednesday and make the combination pay for investors.
Bayer’s initial $ 122-per-share bid for Monsanto came barely two weeks after Mr. Baumann took over the corner office in early May. It shook up a global agrochemical industry already astir with mergers and acquisitions.
Mr. Bauman, 53 years old, closed the deal by raising his offer only about 5% above that first bid, further surprising — and pleasing — many investors. Some had predicted Bayer could need to raise its offer as high as $ 135 a share to satisfy Monsanto’s board.
Bayer and Monsanto said the German firm would pay $ 128 a Monsanto share. The deal including debt is valued at $ 66 billion.
“This is not about individuals,” Mr. Baumann said in an email Thursday. He said Bayer’s “focus has always been and will be in the future” on helping growers world-wide “produce safe, nutritious and affordable food for all of us.”
Still, investors were generally positive about Mr. Baumann’s apparent coolheadedness during the protracted talks with Monsanto.
“So far, he’s proven to be a good negotiator. He’s been quite efficient, ” said Fabrice Theveneau, head of global equities at Paris-based Lyxor Asset Management, a Bayer investor.
Markus Manns, a portfolio manager at Union Investment, another Bayer shareholder, said Mr. Baumann had shown investors he wouldn’t spend heedlessly to complete a deal. “I’m a little bit more optimistic,” he said.
“What is smart is the financing,” Mr. Theveneau added.
He said Mr. Baumann had taken advantage of access to debt at very low interest rates to largely pay for the deal, which would allow the acquisition to quickly enhance earnings.
Mr. Bauman in the past served as Bayer’s chief financial officer.
Bayer said Wednesday it expected the deal to boost earnings per share by double digit percentages in the third full year. The company is financing the deal through a combination of equity and debt, with $ 57 billion in bridge financing committed by five banks, including BofA Merrill Lynch and Credit Suisse.
“At the same time, it’s a big bet,” Mr. Theveneau cautioned.
He cited uncertainty over whether the deal would pass regulatory muster from roughly 30 agencies around the world, as well as the high fee of $ 2 billion that Mr. Baumann agreed to pay Monsanto if the deal falls through.
“Just closing the deal is not a sign of success,” said Nils Stieglitz, a professor at the Frankfurt School of Finance and Management. “It’s going to really depend on whether he can turn this acquisition into a [reality].”
Prof. Stieglitz said that while he had “doubts” about whether the deal would ultimately succeed, he said that it was “not reckless,” as some investors have charged.
Analysts have widely said Bayer’s crop science business, a leader in crop protection chemicals, is complementary with Monsanto, which is a world leader in seeds.
Prof. Stieglitz said Mr. Baumann’s background as finance chief is emblematic of a “new breed” of German CEOs. Ten years ago, he said, less than 10% of German chief executives had experience in financial functions, highlighting the relatively lesser importance of capital markets for German corporates at that time. Past CEOs were more likely to have science or engineering backgrounds, he said.
Mr. Baumann started his career in Bayer’s finance department, rose to CFO and most recently served as strategy chief.
In that role, he had long been contemplating a bid for Monsanto — a move at odds with his predecessor, Marijn Dekkers, who had built up the company’s health-care operations.
Mr. Baumann started developing plans for a Monsanto takeover after the U.S. company’s failed $ 46 billion bid for Syngenta AG of Switzerland last year, according to two people familiar with internal deliberations. Mr. Dekkers at that point strongly opposed the idea, one of these people has said.
By the time, Mr. Baumann was able to put the wheels in motion for a Monsanto takeover — the moment Mr. Dekkers departed — the agrochemical landscape was already in the midst of rapid consolidation and Mr. Baumann knew he had to act quickly, he said later.
Rival seed developers Syngenta, Dow Chemical Co. and DuPont Co. have all recently struck deals, which could make seeking regulatory approval even more complicated, experts say.
“As one of the major players in the industry, it has always been clear that we needed to take a position,” he said in an interview earlier in the summer.
Write to Christopher Alessi at christopher.alessi@wsj.com
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