Syngenta rejects revised Monsanto acquisition proposal

Syngenta’s top executives sent a letter to shareholders and other stakeholders on Monday that said a second takeover offer from Monsanto contained the same deficiencies that caused Syngenta to reject Monsanto’s earlier proposal to buy the company for $45 billion.

Syngenta Chairman Michel Demaré and CEO Mike Mack said the only change was Monsanto’s offer to pay a $2-billion reverse break-up fee to Syngenta if it were unable to obtain global regulatory approvals for an acquisition.

Demaré and Mack said Monsanto’s second letter represented the same inadequate price, the same inadequate regulatory undertakings to close, the same regulatory risks and the same issues associated with dual-headquarters moves. As such, they reiterated the company’s prior rejection of Monsanto's proposal.

“If a transaction were to be announced and not consummated, there would be significant harm and value destruction for Syngenta and its shareholders, which requires a careful assessment of all risks and a clear path to closing, and is in no way adequately addressed by a paltry reverse-regulatory-break fee relative to such fees seen in transactions with comparable levels of regulatory risk,” the executives said.

Demaré and Mack said Syngenta's board, in conjunction with its legal advisers, does not think the regulatory issues can be resolved with a pre-agreed and pre-announced package of horizontal divestitures -- Monsanto's proposed approach.

“There are notable examples of proposed transactions that have been blocked by regulators due to ‘conglomerate concerns’ and other nonhorizontal issues, and the board has concern that a combination between Monsanto and Syngenta may be viewed as such,” the executives said.

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