Syngenta rejects $45 billion Monsanto takeover offer

Date:05-11-2015

Syngenta last Friday rejected a $45 billion takeover offer from Monsanto, saying the offer undervalued the Swiss firm and did not fully take into account regulatory risks.

Sources had told Reuters that the two agricultural companies were working with investment banks on a takeover deal that would create an industry behemoth with combined sales of more than $31 billion.

But last Friday Syngenta said its board had unanimously rejected a 45-percent cash offer by Monsanto that would value Syngenta at 449 Swiss francs ($486.35) per share.

"The offer fundamentally undervalues Syngenta's prospects and underestimates the significant execution risks, including regulatory and public scrutiny at multiple levels in many countries," Syngenta said in a statement.

Syngenta shares rose 17 percent to 390 Swiss francs by 0715 GMT (3.15 a.m. EDT) last Friday after the bid approach was confirmed.

Swiss company Syngenta had been working with Goldman Sachs to assess the merits of a sale to the world's largest seeds company Monsanto, which is being advised by Morgan Stanley, the sources had earlier told Reuters.

Rumours of talks between the two companies gained pace at the end of April, sending shares in Syngenta to a record high of 351 Swiss francs on May 4.

Monsanto, which initially approached Syngenta last year, has long been interested in its Swiss rival and the potential to base itself in Switzerland and benefit from lower taxes, one of the sources told Reuters.

Following attempts by the U.S. Treasury to clamp down on such moves, known as tax inversion, Monsanto may have to buy Syngenta in a cash rather than stock transaction and would be unable to redomicile in Switzerland, an industry source said.