Monsanto pulls bid for Syngenta

Following the announcement, Monsanto stock is up 7.36% trading at $96 as of 1:57 PM EDT, as the company would not have to pay a significant premium to acquire Syngenta. “We take note of Monsanto’s decision”. It also said it would resume a share buyback program.

Syngenta is the world’s No. 3 seeds producer and the biggest maker of pesticides and fungicides. Assume what’s left makes $13 billion of revenue in 2017, and that the potential cost savings are nine per cent of that, at the high end of what was achieved in similar mergers.

So far the Basel-based company has refused to negotiate with Monsanto, arguing that it has stronger prospects on its own and that a cost-cutting reorganisation is just starting to bear fruit.

The deal’s collapse leaves Monsanto, Syngenta and other agrochemical sector companies facing a bleak landscape of plummeting grain prices and farm income.

Monsanto believed that it is still in the best position to drive a comprehensive, and integrated strategy with industry leading assets in breeding, biotechnology, data science, next-generation biologicals, and multiple options to build on its existing crop protection portfolio.

Monsanto said the August 18 offer would have amounted to 470 francs per share overall, including a 245 franc cash component.

Monsanto first approached Syngenta about a deal in June and was rebuffed.

The proposed merger would, nevertheless, virtually definitely face vital opposition from regulators, politicians, and environmentalists on each side of the Atlantic cautious of permitting Monsanto extra affect over agriculture.

“We engaged with Monsanto in good faith and highlighted those key issues which required more concrete information in order to continue a dialogue”, Michel Demaré, Chairman of Syngenta said in a statement. “But we also remain of the firm view that it will not go hostile, and it will not pay much more than CHF475 without having seen the books”, it said. The company said it remains confident it will deliver its five-year plan to more than double fiscal year 2014 earnings per share by 2019. The Lawn and Garden business offers a range of products for use in the flower genetics, ornamentals, consumer lawn and garden, and Turf and landscape markets.