Monsanto Sweetens Syngenta Offer With $2 Billion Breakup Fee

June 8, 2015 07:25 AM
Monsanto Sweetens Syngenta Offer With $2 Billion Breakup Fee

Monsanto sweetened its offer to acquire Syngenta with a promise to pay $2 billion if the deal doesn’t go through, but Syngenta says it’s still not interested.

The back-and-forth represents the latest development in the uncertain courtship between the two agribusiness companies. In April, the St. Louis-based Monsanto made an unsolicited offer to buy Syngenta for $45 billion, which was rejected.

“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 at the time. Syngenta is based in Switzerland.

Monsanto has continued to pursue Syngenta, asserting that its lawyers and advisers believe that the regulatory issues raised by the merger could be overcome. Monsanto is interested in Syngenta’s crop protection offerings and would likely sell Syngenta’s seed business and perhaps its herbicide business as well should the deal go through.

Monsanto has been very public about the opportunity it sees in such a deal, with President and COO Brett Begemann discussing the potential in investor presentations last month. “The new company would leverage the strengths of Monsanto and Syngenta – including their world-class scientists and R&D capabilities – to enhance the scope and speed of breakthrough innovation in the industry. This would enable more efficient delivery of integrated and sustainable solutions across all the major technology-driven platforms of breeding, biotechnology, crop protection, microbials and precision agriculture,” said a company statement summarizing Begemann’s presentation.

Syngenta, however, appears to be unswayed.

In a statement released Monday, the Swiss company said that the $2 billion breakup fee is simply not enough to cover the risk of the deal falling through. It also said that it remains seriously concerned about the regulatory challenges posed by such a merger.

“Syngenta’s Board, in conjunction with its legal advisors, does not think the regulatory issues are resolved as simply as by a pre-agreed and pre-announced package of horizontal divestitures, which is Monsanto’s proposed approach. There are notable examples of proposed transactions that have been blocked by regulators due to ‘conglomerate concerns’ and other non-horizontal issues and the Board has concern that a combination between Monsanto and Syngenta may be viewed as such,” Syngenta said in a statement. “…. Monsanto continues to gloss over these fundamental transaction risks.”

Read Monsanto’s statement on its latest offer for Syngenta here. 

Read Syngenta’s response rejecting the offer here.

What do you think about a Monsanto/Syngenta deal? How do you think it might affect farmers? Give your opinion on the AgWeb discussion boards



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Spell Check

Terry Bergemann
Vernon center , MN
6/15/2015 08:36 AM

  I the BIBLE in revelations you will not be able to buy or sell without the mark of the beast. That mark will be Monsanto.

bill crowe
darlington, IN
6/15/2015 05:58 PM

  monosanto has no scruples have judges in all US courts . will force all farmers to grow just form them they must be stoped at all costes.

Clark Porter
Waterloo, IA
6/8/2015 08:48 AM

  Am I the only one who thinks the public nature of this dialogue between the two is scripted? It seems very unusual, and it has the effect of reducing our fears about the power such a conglomerate would have.