Interrupted several times by angry shareholders demanding a stop of the Bayer-Monsanto merger and shouting "you poison our soil," Bayer's chief executive acknowledged on Friday that he would face an uphill battle to improve Monsanto's reputation once Bayer completes the takeover of the US seeds and agrochemicals company.

"Monsanto's image does of course represent a major challenge for us, and it's not an aspect I wish to play down," Werner Baumann told shareholders at Bayer's annual general meeting.

"Yet we are facing this challenge with all those qualities that have made us what we are today: openness, expertise and responsibility," he added.

Baumann also said the acquisition would "fit perfectly" into Bayer's strategy and would add "long-term value" to the German company.

Bayer and Monsanto plan to wrap up the transaction worth $66 billion (51.14 billion pounds) by the end of 2017, hoping to secure European antitrust approval during the second quarter.

Money outbids ethics

Outside the conference hall in Bonn, Germany, about 200 environmentalists also staged protests highlighting health concern's over Monsanto's flagship chemical Roundup whose main ingredient glyphosate allegedly causes cancer. Moreover, protesters raised fears of a monopoly being created in the seeds sector, causing prices to go up and hurting smallholding farmers in the developing world.

Despite the controversy surrounding the deal, a wide majority of both companies' shareholders approved the tie-up last year. It came after the German company had made a third sweetened offer of $128 per share, marking the largest all-cash deal on record.

Bayer has funded the transaction by issuing $19 billion worth of convertible bonds and new shares, and said banks had also committed to providing $57 billion of bridge financing.

Agro-chemical behemoth

The transaction will create a company commanding more than a quarter of the combined world market for seeds and pesticides in the fast-consolidating farm supplies industry.

Analysts also believe that there will remain uncertainty over what the combined company will look like as regulators might demand asset sales.

Bernstein Research analysts said they saw only a 50 percent chance of the deal winning regulatory clearance, although they cited a survey among investors that put the likelihood at 70 percent on average.

"We believe political push-back to this deal, ranging from farmer dissatisfaction with all their suppliers consolidating in the face of low farm net incomes to dissatisfaction with Monsanto leaving the United States, could provide significant delays and complications," they wrote in a research note.

Therefore, the transaction includes a $2 billion break-up fee that Bayer will pay to Monsanto should it fail to get regulatory clearance.

uhe/mds (Reuters, dpa)