Monsanto Eyes New Acquisitions Following Syngenta Pull Out

Monsanto Eyes New Acquisitions Following Syngenta Pull Out



CHICAGO, IL - The long-time cat and mouse chase between Monsanto and Syngenta came to an abrupt end early last week, when Monsanto withdrew a $47 billion bid it had offered its European-based competitor. The decision appeared sudden, leaving the question: what’s next for both companies?

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Reuters reports that the seed company has previously mentioned other ventures both in addition to or in substitute of Syngenta, including wanting to expand its portfolio of crop-protection chemicals and seed-treatment products.

Michael Frank, Vice President of Monsanto's Global Commercial Business"If we don't acquire Syngenta, we'll still be on Plan A. But there will be a substitute company," Michael Frank, Vice President of Monsanto's Global Commercial Business, told Reuters. "It won't be Syngenta. It will be somebody else, or somebodies else."

In the official announcement, however, the company declined to say anything more than that it would turn its focus to resuming its two-year, $10 billion share repurchase program and improving its core business, as we previously reported. Though last month, Brett Begemann, President of Monsanto, had told Reuters that there were other acquisition options and that Syngenta was not the only idea in the works.

While Canaccord Genuity analysts speculated to Reuters that Monsanto could turn its focus to furthering agreements in both licensing further molecules and collaborating with partners on joint development of molecular applications, Syngenta remains up for sale.

Pauline McPhereson, Co-Fund Manager, Kames Capital's Global Equity Fund"Crop chemical assets are undervalued by the market and therefore, any crop chemical asset is attractive," Pauline McPherson, Co-Fund Manager of Kames Capital's Global Equity Fund (holder of Syngenta stock) said, according to the report.

As it stands, there are no clear contenders to replace Monsanto in the bid for the Swiss company, though German-based chemicals group BASF put together a loan package for a prospective bid earlier in the summer from large multinational banks.

BASF SE Office in Wyandotte, MI

While a spokeswoman for BASF spokeswoman told Reuters the company could not comment on the market or other companies last Wednesday, additional sources stated this could have been to prevent the amount of growth Monsanto would see from acquiring Syngenta.

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