Bayer, through Aviator Acquisition, a wholly-owned subsidiary of Bayer Nordic, will launch a voluntary offer to acquire Algeta for $58.7 per share in cash, for a total value of approximately $2.9 billion. Algeta’s board of directors has unanimously decided to recommend its shareholders accept the offer.

The price represents a 37% premium to Algeta's closing share price on Nov. 25, the last trading day prior to the announcement of Bayer's preliminary acquisition proposal, and a 48% premium to the three-month volume weighted average.

"The Algeta board has undertaken a careful review of the terms and conditions of the offer. We believe the offer recognizes the strategic value of Algeta and delivers a considerable cash premium to our shareholders," said Stein Holst Annexstad, chairman of the board of Algeta. "Having worked with Bayer since 2009, the board is convinced of Bayer's commitment to establishing Xofigo (radium Ra 223 dichloride) globally, and maximizing its blockbuster potential."

Bayer expects to close the transaction during the first quarter of 2014.