Posted June 11, 2015
Syngenta has rejected a second takeover bid from Monsanto, which included a $2 billion breakup fee if the proposed $45 deal failed to meet regulatory muster, according to an Agri Pulse article available here. The New York Times also published an article available hereand Wall Street Journal here.
As stated in Monsanto’s letter, their offer “represents the same inadequate price, same inadequate regulatory undertakings to close, same regulatory risks and same issues associated with dual headquarters’ moves” as in its original offer in April, Syngenta said in a statement. “The only change by Monsanto is to add a wholly inadequate reverse regulatory break fee.”
If accepted, Monsanto would create the world’s largest supplier of crop seeds and chemicals. They are already the world’s largest seller of seeds and a leader in biotechnology, while Syngenta is the top seller of pesticides, fungicides and herbicides, according to The Wall Street Journal.
Monsanto intends to rename their company and place its headquarters in the United Kingdom, according to details of its proposal released on Monday by Syngenta, which could lower the tax rate of the combined firm.
Syngenta said Monsanto’s bid undervalued Syngenta’s prospects and underestimated “the significant execution risks, including regulatory and public scrutiny at multiple levels in many countries,” according to The New York Times.
On Monday, Syngenta said that they did not believe that the regulatory concerns would be resolved by “a pre-agreed and pre-announced package of horizontal divestitures, which is Monsanto’s proposed approach.”
Monsanto has said that it would sell Syngenta’s seed business and other overlapping businesses.
For more information on biotechnology, please visit the National Agricultural Law Center’s website here.