Syngenta rejects $45 billion Monsanto takeover offer

Syngenta rejects $45 billion Monsanto takeover offer

7:35 AM, 9th May 2015
Syngenta rejects $45 billion Monsanto takeover offer

ZURICH, SWITZERLAND/LONDON, UK: Agrochemicals firm Syngenta AG on Friday rejected a $45 billion takeover offer from Monsanto Company, saying the offer undervalued the Swiss firm and did not fully take into account regulatory risks.

Sources had told overnight that the two agricultural companies were working with investment banks on a takeover deal that would create an industry behemoth with combined sales of more than $31 billion.

But on Friday Syngenta said its board had unanimously rejected a 45-percent cash offer by Monsanto that would value Syngenta at 449 Swiss francs ($486.35) per share.

“The offer fundamentally undervalues Syngenta’s prospects and underestimates the significant execution risks, including regulatory and public scrutiny at multiple levels in many countries,” Syngenta said in a statement.

Swiss company Syngenta had been working with Goldman Sachs to assess the merits of a sale to the world’s largest seeds company Monsanto, which is being advised by Morgan Stanley, the sources had earlier told the news agency.

Monsanto, which initially approached Syngenta last year, has long been interested in its Swiss rival and the potential to base itself in Switzerland and benefit from lower taxes, one of the sources told Reuters.

Following attempts by the U.S. Treasury to clamp down on such moves, known as tax inversion, Monsanto may have to buy Syngenta in a cash rather than stock transaction and would be unable to redomicile in Switzerland, an industry source said.

A deal would come as prospects for genetically modified (GM) crops are improving in the European Union after a change in its legislation unlocked a stalled approval process. Monsanto owns the only GM product approved for cultivation in the EU, a modified maize.

Despite the two companies' cultural affinity, a merger may be challenged by antitrust regulators, primarily in North America, where the two groups are already seen as market leaders in the seeds industry.

Syngenta, which was formed in 2000 by the merger of Novartis Agribusiness and Zeneca Agrochemicals, also competes with Bayer CropScience and DuPont Pioneer.

© Reuters News

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