Syngenta rejects Monsanto’s break fee offer

Monsanto’s offer of a US$2 billion break fee if it can’t get regulatory approval for a merger with crop biotech and ag chem rival Syngenta has been rejected.

The offer, made in a letter from St. Louis-based Monsanto on Saturday, “represents the same inadequate price, same inadequate regulatory undertakings to close, same regulatory risks and same issues associated with dual headquarters’ moves,” Syngenta said in a release Monday.

“The only change by Monsanto is to add a wholly inadequate reverse regulatory break fee.”

Break fee or not, if a deal were to be “announced and not consummated,” Syngenta said that could lead to “significant harm and value destruction for Syngenta and its shareholders.”

Such a merger, the Swiss company said Monday, “requires a careful assessment of all risks and a clear path to closing, and is in no way adequately addressed by a paltry reverse regulatory break fee relative to such fees seen in transactions with comparable levels of regulatory risk.”

Furthermore, Syngenta “does not think the regulatory issues are resolved as simply as by a pre-agreed and pre-announced package of horizontal divestitures, which is Monsanto’s proposed approach.”

In announcing the break fee proposal Saturday, Monsanto CEO Hugh Grant said it’s “disappointing that Syngenta has not engaged in substantive discussions about the many benefits of this combination, including the benefits for farmers around the world.”

The U.S. company “devoted significant time and resources analyzing the potential combination with Syngenta, and we are confident in our ability to obtain all necessary regulatory approvals,” he said.

Monsanto’s original proposal to Syngenta, made privately in mid-April, was a stock-and-cash offer worth about 449 Swiss francs (C$601) per Syngenta share, which would put its total valuation at about C$55.9 billion. — Network


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