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What's next for Monsanto, Syngenta?qrcode

Aug. 31, 2015

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Aug. 31, 2015
After dropping its $47 billion bid to take over Swiss agribusiness firm Syngenta, Monsanto may be turning its focus to smaller acquisitions and potential licensing deals, reports Angela Mueller on St. Louis Business Journal.

Last Wednesday, Monsanto said it was no longer pursuing an acquisition of Syngenta and would instead focus on growth opportunities “built on its existing core business.” The company also said it plans to resume its $10 billion share buyback program that had been put on hold.

The company may now put its emphasis on building up its crop protection portfolio through other acquisitions, partnerships and licensing agreements, Reuters reports. In a previous interview with Reuters, Michael Frank, Monsanto’s vice president of global commercial business, said the company wanted to grow its offerings of crop-protection chemicals and seed-treatment products, with or without Syngenta.

“If we don’t acquire Syngenta, we’ll still be on Plan A. But there will be a substitute company,” he told Reuters.

Meanwhile, Syngenta may be facing pressure from shareholders to increase the company’s value after rejecting Monsanto’s bid, Reuters reports.

“If Syngenta’s share price remains at current levels of 310 Swiss francs, that is 40 percent below Monsanto’s most recent bid proposal, the pressure from Syngenta shareholders will arguable build up quickly to pursue changes that increase value,” analysts at Zuercher Kantonalbank said in a research note. “These could be announced soon.”

Monsanto had offered $47 billion for the Swiss agribusiness firm in its latest bid. This most recent bid reportedly contained a higher proportion of cash than the prior bid, which comprised 45 percent cash to 55 percent Monsanto shares. It also reportedly included a breakup fee of $3 billion, up from $2 billion.

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