• Sarah Day Levesque

Bloomberg: Monsanto Offers to Buy Syngenta Again

The world’s largest seed company, Monsanto, has again offered to purchase crop chemical company, Syngenta, according to Bloomberg reports.

Last year, the two companies had been in preliminary talks regarding a $40 million takeover by Monsanto that would have created the world’s largest agrochemical company with more than $30 billion in revenue. Those talks fell apart and any current talks would likely face similar challenges.

One of the biggest challenges facing the deal may be the anti-trust concerns expressed by the Swiss-based Syngenta, in particular the incredible market share in soy and corn seeds that the combined companies would have. Sources close to the story suggest that to get past regulatory approval Monsanto has plans to sell off parts of the combined business. Indeed, Bloomberg reported on Colin Isaac’s of Atlantic Equities LLP suggestion that Syngenta’s activities in the corn and soy markets would be of great interest to other agri-giants, such as Dow Chemical, Bayer and BASF SE, or even private equity players.

Monsanto declined to comment and Syngenta could not be reached. Meanwhile, shares of Syngenta AG (NYSE: SYT) were up over 15% on Friday after news of the potential takeover.

Monsanto-Syngenta Deal May Drive More Sector Activity

Bill Selesky, an analyst at Argus Research Co. claims DuPont Co. could be a potential buyer of any divested assets in a Monsanto-Syngenta deal, according to Bloomberg reports.

Other speculation addressed in a recent Bloomberg article points to the potential for a Monsanto-Syngenta deal to spur further deals in the ag sector as existing players weigh a new $60 billion competitor. Dow, which has faced an activist investor pushing for the company’s breakup and whose Chief Executive Officer Andrew Liveris has indicated openness to divesting the agricultural unit, could be a good fit for acquisition by DuPont, Isaac of Atlantic Equities told Bloomberg.

Alternatively, Dow and DuPont may be included in a list of potential counter bidders for Syngenta, according to Selesky. Martin Lehmann, manager of 3v Asset Management’s 3v Invest Swiss Small & Mid Cap Fund asserts that Dow would establish stronger market share in crop protection and seed markets.

Regardless of how it all plays out, “A Monsanto/Syngenta Deal would mark the beginning of further deals,” Lehmann wrote in an email to Bloomberg.

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Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@highquestgroup.com.

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