ZURICH, Switzerland (Reuters) — Monsanto is walking away from efforts to acquire Swiss rival Syngenta AG after Syngenta rejected a recently sweetened offer.
Monsanto said it still believes in the value of a combination of the two agricultural seed and chemical giants but will focus on building its core business and meeting long-term growth objectives.
The offer, which Syngenta said was worth $606 per share as of the market close Aug. 25, “significantly undervalued the company and was fraught with execution risk.”
Recent market volatility had highlighted the “significant risk” for Syngenta shareholders from the structure of the proposal, which it said had not addressed key issues in sufficient detail.
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“We engaged with Monsanto in good faith and highlighted those key issues which required more concrete information in order to continue a dialogue,” said Syngenta chair Michel Demare.
“Our board is confident that Syngenta’s long-term prospects remain very attractive with a leading portfolio and a promising pipeline of new products and technologies. We are committed to accelerate shareholder value creation.”
Syngenta said Monsanto’s verbal offer lacked details that would have let it properly assess the proposed new entity, which it said would have been 30 percent owned by Syngenta shareholders.
It cited lack of clarity on Monsanto’s estimate of total cost and revenue synergies, assumptions on net sales proceeds from seeds and traits, the nature and extent of regulatory covenants Monsanto was prepared to offer and the assessment of risks and benefits from a tax inversion to Britain.
