• Lynda Kiernan

Syngenta Rejects Monsanto’s $45 Billion Bid for Takeover

Last week GAI News covered the world’s largest seed company, Monsanto’s, most recent bid to purchase Syngenta, the world’s largest crop chemical company. Now there is word that Syngenta has rejected the $45 billion bid.

Last year the two companies began negotiations regarding a $40 billion takeover that would create the world’s biggest agrochemical company with revenues exceeding $30 billion, but the talks soon stalled when Syngenta management decided to end negotiations.

Returning to the table in recent weeks, Syngenta has rejected Monsanto's latest offer of 449 Swiss francs per share, a bid that values the company at $45 billion, or 17 times the company's earnings before interest, taxes, depreciation, and amortization (ebitda). Syngenta claims the offer undervalues the market potential of the company.

"Monsanto’s proposal does not reflect the outstanding growth prospects of Syngenta’s integrated strategy and the significant future value potential of the company’s crop-focused innovation and market leading positions," Syngenta Chairman Michel Demaré said in a company statement.

According to data compiled by Bloomberg revealing that over the past decade, large agrochemical deals have carried a median multiple of 12 times a company’s earnings before interest, taxes, depreciation, and amortization (ebitda). If a deal for Syngenta is successful, it would be one of the most expensive acquisitions in recent history.

Although Syngenta has rejected Monsanto’s latest offer, it has signaled that it is willing to remain open to future negotiations, but any possible deal will still face considerable hurdles. Syngenta, with a market value of $34 billion, remains uncertain about the strategic fit of the deal, relocation, and anti-trust issues - in particular, about the massive global market share the new entity would control in soy and corn seed. Sources close to the issue say that to resolve this issue, Monsanto has said it would forge a deal that would include the sale of a portion of the resulting combined company.

Monsanto spokesman, Lee Quarles declined to comment on the issue, and Syngenta spokesman, Paul Minehart was not immediately available for comment.

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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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