BASEL, SWITZERLAND - Syngenta AG has rejected a takeover offer from U.S. rival Monsanto Co. Syngenta says the offer, valued at roughly $45 billion, undervalues the Swiss agrochemical giant.
"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.
“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,” a source told Reuters.
Merging Monsanto, the world’s largest seller of agricultural seeds, and Syngenta, the leading pesticide marketer in terms of sales, would create a huge force in the Ag industry. Combined, the two companies have have about 45 percent of the global market for seeds, according to The Wall Street Journal. The annual revenue of the two companies is around $31 billion.
The Wall Street Journal reports that Monsanto had believed that its 45 percent cash offer would provide “a very attractive premium” for Syngenta shareholders.
“Monsanto, in conjunction with its financial and legal advisors, has devoted significant time and resources to analyzing a potential combination of Syngenta and Monsanto and is confident in its ability to obtain all necessary regulatory approvals,” the company said.
Many investors warn that any merger of the two companies may be challenged by antitrust regulators, primarily in North America. According to Bloomberg Business, Monsanto’s dominance in the seed industry has been the subject of U.S. antitrust probes at the federal and state levels.
Reuters reports that Syngenta shares rose 17 percent to 390 Swiss francs by 0715 GMT on Friday after Monsanto’s bid approach was confirmed, according to Reuters.
