Monsanto tries again to acquire Syngenta

Jun 09, 2015

Syngenta again rejected the offer

It was William Edward Hickson who said “if at first you don’t succeed, try, try, try again.”

Monsanto, the agrichemical giant best known for its glyphosate product Roundup, has submitted another bid to acquire another agricultural giant, Swiss company Syngenta.

Monsanto

In early May 2015, Monsanto put a bid on the table of $45 billion to takeover Syngenta, but the deal 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,” a press release at the time said.

Monsanto’s bid this time around mirrored the initial bid. $45 billion purchase price, but with one difference.

The second offer came with a $2 billion reverse breakup fee. It would cover any costs if Syngenta was unable to secure the global and regulatory approvals for the deal within an 18-month period.

Syngenta

A fee that Syngenta doesn’t seem to think is fair.

“The only change by Monsanto (between bids) is to add a wholly inadequate reverse regulatory break fee,” Syngenta Chairman Michel Demaré and CEO Mike Mack said in a press release. “Monsanto continues to gloss over these fundamental transaction risks.”

The Syngenta statement also discloses that representatives from the two companies have met on three separate occasions between Monsanto’s bids.

An analyst with German bank Berenberg, John Klein, told Bloomberg that Monsanto could submit another bid directly to Syngenta’s shareholders or even proceed with a hostile takeover.

A brief look at Monsanto and Syngenta:

	Monsanto	Syngenta
Headquarters	St. Louis, Missouri, USA	Basel, Switzerland
Price per stock share as of Tuesday, June 9^th , 2015	$113.38	$86.55
Net Sales	Approx. $5.2 billion (as of April 1^st, 2015)	$4.0 billion (as of April 17^th, 2015)
Founded	1901	1999

A deal between the two would create a company with more than $31 billion in sales.

Tell us your thoughts about Monsanto’s persistence in trying to acquire Syngenta and Syngenta’s decisions to reject the bids. If the two were to come an agreement, how would it affect your farming operations?

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