Monsanto has abandoned its long running bid to acquire Syngenta, following the Swiss multinational’s rejection of its latest raised offer.
The chase first became public in early May this year (ATN May 8th) but it appears that Monsanto first made an approach twelve months before. Both companies have $15 billion turnovers, but Monsanto generates two thirds of its turnover from seeds and traits, and the rest from agrochemicals, whereas Syngenta is the reverse with two thirds of sales from agrochemicals.
Monsanto’s initial offer was worth some $45bn for a 70% stake in the merged company, with a further $2bn added to compensate Syngenta should the takeover be rejected by the competition regulators. The latest bid, tabled this week, was for $47bn plus a $3bn reverse break-up fee.
Syngenta has steadfastly rejected the approaches, stating the offer undervalues the company and its pipeline, while the risk of regulatory refusal and the impact upon the business would not be redressed by the ‘paltry’ reverse break-up fee.
“We engaged with Monsanto in good faith and highlighted those key issues which required more concrete information in order to continue a dialogue,” comments Syngenta chairman Michel Demaré. “We take note of Monsanto's decision. Our board is confident that Syngenta's long-term prospects remain very attractive with a leading portfolio and a promising pipeline of new products and technologies.”
A Monsanto statement says the business “believes a combination with Syngenta would have created tremendous value for shareowners of both companies and farmers”. Instead, it will continue to “focus on its growth opportunities built on its existing core business to deliver the next wave of transformational solutions for agriculture.
“Monsanto remains the best positioned to drive a comprehensive integrated strategy, with industry-leading assets in breeding, biotechnology, data science, next-generation biologicals, and multiple options to build on its existing crop protection portfolio,“ it says.