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Syngenta’s CEO says company is open to discussions
Dec. 23, 2015
Syngenta AG
SwitzerlandFollow
SwitzerlandSyngenta is discussing possible deals with "a number of parties" and is open to combinations with companies including U.S. rival Monsanto Co. as consolidation in the agriculture industry intensifies, the Swiss pesticide giant's top executive said.
John Ramsay, who was appointed Syngenta's interim chief executive in October, said in an interview Friday that the company is "interested in any value-adding opportunity that exists for us in this industry, which includes Monsanto and many others."
Ramsay's professed openness to a tie-up with Monsanto marks a shift from Syngenta's posture a few months ago. Monsanto in August abandoned a $46 billion takeover move for Syngenta after the Swiss company's board repeatedly declined to enter formal talks, citing antitrust risks and concerns that Monsanto's offer was too low.
Since then, Syngenta, the world's largest pesticide company and a major seed supplier, has faced pressure from shareholders to consider tie-ups. The recent merger deal between DuPont Co. and Dow Chemical Co., both major agricultural suppliers, effectively removed two potential partners for Syngenta and could eventually pose a greater competitive threat in the roughly $100 billion global seed-and-pesticide industry.
"We are prepared to discuss options with the whole industry, including Monsanto, but our focus has got to be on the ability to actually believe in the value creation and have the confidence we can pull it off," Ramsay said.
While Monsanto hasn't reached out to Syngenta again about a deal, he said, "they know where we stand, and I think we know where they stand."
"If there's a willingness to discuss, then we are prepared to discuss," Ramsay said of Monsanto.
A Monsanto spokeswoman declined to comment specifically on Ramsay's remarks. She said Monsanto believes consolidation will continue, but there is "no pressure to act rashly" and any deal needs to have a strong strategic fit.
China National Chemical Corp., or ChemChina, has been interested in acquiring Syngenta, according to people familiar with the discussions. Ramsay declined to comment on any such interest, though he said a deal with ChemChina, a smaller player in agricultural products, would likely face lower regulatory risks than a combination with Syngenta's main Western rivals, which also include Bayer AG and BASF SE.
Ramsay, who is 58 years old, said he has put himself forward as a candidate for the permanent CEO job. Syngenta's board is considering internal and external candidates for the job and a decision is "some months" off, he said. Mr. Ramsay assumed the role after prior CEO Michael Mack retired at the end of October.
Syngenta also is revisiting its decision to sell its vegetable-seed unit to "double-check the implications" for the company's broader seed-research functions, Mr. Ramsay said.
The Alliance of Critical Syngenta Shareholders, a group convened after Monsanto dropped its pursuit, said on Friday that it had identified nearly 10% of the company's shareholder base that supports changing Syngenta's board and putting the company up for sale. The group has criticized Syngenta for slow growth and losing market share to rivals in the U.S. seed business.
Ramsay hit back at the group's assertions, saying they don't represent the view of all Syngenta investors. He said he had met with shareholders representing 45% of Syngenta's stock in recent weeks and that they support Syngenta's moves to review its seed business and believe in the profit potential of new products under development at the company.
Source: Dow Jones Newswires
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