Syngenta AG (ADR) (NYSE:SYT) has once again declined a takeover bid from Monsanto Company (NYSE:MON).
Monsanto has been on a mission to acquire Syngenta in a deal that would result in the formation of the biggest conglomerate in the crop seeds and chemical supply industry. The bidding firm holds the crown for biotechnology as well as the top seller of seeds. Syngenta, on the other hand, has an exceptional presence in the pesticide industry. It mostly deals with pesticides that target insects, weeds and fungus.
On Saturday, Monsanto’s CEO, Hugh Grant sent a merger proposal letter to Syngenta’s board. Grant wrote that his firm would be willing to boost its offer from $447.87 per share if Syngenta would agree to the proposal to merge. Syngenta turned down the deal despite the appealing offer.
According to the proposal, if the proposed merger were to take place, Monsanto would rename the conglomerate and relocate the headquarters to the United Kingdom. The report suggested that the deal would lead to reduced tax rates for the conglomerate.
Syngenta is still refusing to be swayed to enter into any formal discussions regarding the proposal. However, representatives of the two firms have been in close talks. Senior officials from Syngenta released a cold statement regarding the merger issues on Monday. They claimed that Monsanto’s plan to divest Syngenta in a way that will allow an overlap between the two firms is not good enough. The reason or their claim is that regulators will still go after them for antitrust issues.
Syngenta’s CEO, Mike Mack, and Chairman Michel Demaré wrote a collaborative letter to Syngenta’s stockholders. Their letter indicated that the offer by Monsanto quoted a similar insufficient price as well as quoting the same unsatisfying regulatory measures. It also quoted the same supervisory risks linked to the two headquarters.
Syngenta’s unwavering stand might be an indicator for Monsanto to propose a better deal. It could also be an indicator that the firm’s officials want Syngenta to remain as a single entity independent on its own.
