Syngenta to Sell Vegetable Seeds Business and Buy Back Shares
BASEL, SWITZERLAND - On the heels of its rejection of Monsanto’s $47 billion takeover bid, Syngenta is making moves to appease investors by divesting its vegetable seeds business.
In an announcement made on Thursday morning, the Swiss agricultural giant said that it intends to “return significant levels of capital to shareholders” by implementing a share buyback program that includes the repurchase of more than $2 billion in shares. The initial program is expected to start in the coming weeks, according to a press release.
As of 1:05 PM EDT, Syngenta’s shares rose approximately 2 percent to $69.28.
Syngenta has been under significant pressure from shareholders as of late after the company repeatedly rebuffed offers from rival seed business Monsanto. In a statement, Syngenta said that Monsanto had fundamentally undervalued the company’s prospects and underestimated the significant execution risks. Had the deal gone through, Monsanto said that it would intend to sell Syngenta’s seed business to appease regulators. Monsanto’s latest offer also included a $3 billion break-up fee if the transaction was blocked by regulators or fell apart for various other reasons.
Monsanto finally gave up its pursuit last week, saying that it will instead focus on “growth opportunities built on its existing core business.”
Syngenta CEO Mike Mack said in a press release, “By demonstrating and unlocking the inherent worth of our leading global seeds portfolio we can create significant additional value. I look forward to updating shareholders in the coming months on progress, including providing further visibility on the underlying profitability of our portfolio of assets.”
According to the New York Times, Syngenta’s vegetable seed business topped $663 million in sales in 2014.
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