August 27, 2015


Monsanto abandons takeover bid for Syngenta



US seed giant Monsanto on Wednesday abandoned its bid to acquire Swiss rival Syngenta, saying its "enhanced proposal" did not meet the leading crop chemicals maker's financial expectations.


Since Syngenta chose to reject its sweetened August 18 bid that included a higher breakup fee of US$3 billion (from the previous offer of $2 billion) in case the deal was blocked by regulators, Monsanto said it would continue to focus on its growth opportunities to "deliver the next wave of transformational solutions for agriculture". 


Under the new proposal, Monsanto also increased the cash component of the proposed new transaction to CHF [Swiss franc] 245 per share, as well as provided Syngenta shareowners with about 30 percent ownership in the new company. The revised proposal also translated to a value of CHF 470 per share.


The combined company would have benefited from "substantial synergies, significant cash EPS accretion and attractive ROIC, as well as a responsible capital structure", Monsanto said. But "without a basis for constructive engagement from Syngenta", it was forced to drop the deal, it added.


In June during a renewed bid for Syngenta, Monsanto Chairman and CEO Hugh Grant said that "combining Monsanto's global seeds, traits and information technology capabilities with Syngenta's global position in crop protection chemicals" would have created "significant value for growers to ultimately meet the needs of broader society". 


The known market value of Syngenta is $31 billion while Monsanto is worth at least $54 billion.

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