LONDON/FRANKFURT (Reuters) — Monsanto is trying to line up buyers for assets worth up to US$8 billion to appease competition authorities before making a fresh takeover bid for Syngenta, industry sources said.
An earlier bid failed when Syngenta turned down Monsanto’s offer, and another bid could possibly come within three weeks.
Monsanto is expected to tap BASF, an existing joint venture partner, as it seeks a buyer for Syngenta’s U.S. seeds business, which can’t be part of its proposed takeover, sources said.
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The company is after Syngenta for its industry-leading crop chemicals, driven by the idea that seeds and pesticides will be better sold and developed together.
Monsanto produces Roundup, the world’s most widely used broad-spectrum herbicide, and has engineered a range of proprietary crops that resist it.
Syngenta closely integrated its seeds and crop chemicals operations in 2011, and Monsanto is expected to unravel some of the main strategic decisions that shaped the group over the last four years: selling off seeds and merging Syngenta’s crop chemicals with Monsanto’s seeds.
Global antitrust authorities are expected to demand remedies to reshape the balance of power in the crop protection industry before any combination is allowed.
Syngenta’s management will not want to be seen backing a deal that is then shot down by antitrust watchdogs, two industry sources said.
Monsanto commands about a quarter of the $40 billion global seeds market, while Syngenta’s seeds business has a global market share of eight percent.
The Swiss company’s seeds business could be worth $6 to $8 billion, according to analysts.
It will have to be sold because authorities are expected to block Monsanto from entrenching its dom-inance of the U.S. soy and corn seeds market.
