Syngenta Rejects Second Monsanto Takeover Offer
ST. LOUIS, MO - It’s déjà vu all over again.
Syngenta has rejected Monsanto’s second takeover proposal, which was, in essence, a repeat of its first $45 billion offer with an additional $2 billion breakup fee if the proposed merger did not meet regulatory approval.
In a letter to Sygenta’s corporate leadership, Monsanto Chairman and CEO Hugh Grant wrote, “Such a fee would be among the highest reverse breakup fees that any company has agreed to.” He also expressed his “personal disappointment” with the pace of the negotiations in the letter.
Sygenta subsequently wrote in a letter to shareholders that Monsanto’s offer “represents the same inadequate price, same inadequate regulatory undertakings to close, same regulatory risks, and same issues associated with dual headquarters’ moves. As such, we have reiterated our prior rejection of Monsanto’s proposal.”
As we reported previously, Brett Begemann, Monsanto’s President, said that if Monsanto were to acquire Syngenta, Monsanto would divest itself of Syngenta’s portfolio of seeds and crop genetics. This, he said, is intended to alleviate potential antitrust challenges combining the world’s number one and number two seed companies by sales.
In an earlier letter, dated April 18, Monsanto’s proposal called for the two companies to merge under a new parent company, with its legal headquarters in the United Kingdom, according to the St. Louis Post-Dispatch. This offer was not included in the second, most recent letter, and would be subject to “further negotiations,” Sara Miller, a Monsanto spokeswoman, told the Post-Dispatch.
The Post-Dispatch also reports that some observers suggest that Monsanto would need to add an additional $5 billion on top of its offer if it wants to complete the takeover. It remains to be seen whether the company will continue its moves to complete the deal. Nevertheless, some Monsanto executives are reportedly meeting with Syngenta shareholders this week in London, Zurich, and other European cities, according to the Post-Dispatch.
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