NEW YORK (The Deal) -- Swiss agricultural chemicals maker Syngenta AG (SYT) on Friday, May 8, said its board has rejected a long-rumored, unsolicited Sfr41.7 billion ($45.2 billion) takeover approach from seed giant Monsanto (MON) because the offer was too low and could be tough to complete.
Syngenta, of Basel (Switzerland), said Monsanto had hoped to pay Sfr449 per share in cash and stock for Syngenta, a 38% bonus to the target's Thursday close. The bid included at least 45% in cash.
"Monsanto's proposal does not reflect the outstanding growth prospects of Syngenta's integrated strategy and the significant future value potential of the company's crop-focused innovation and market leading positions," said Syngenta Chairman Michel Demaré.
The executive noted that Syngenta is the world leader in crop protection chemicals and No. 3 in seeds, highlighting both the logic and difficulties of the approach. Monsanto, of St. Louis, is the world's biggest seed maker but needs to bulk up in chemicals to remain competitive -- any merger would have to include significant disposals, such as Syngenta's U.S. seed business, to win regulatory approval.
Syngenta shares leapt 17.3%, or Sfr57.60, in late morning Zurich trading to Sfr390.3.
Monsanto may also want Syngenta in order to reincorporate in Syngenta's Alpine home to save tax dollars in what is commonly known as an inversion deal. Such acquisitions have raised hackles in Washington and the Treasury Department last September instituted new rules to prevent such deals, albeit with mixed results.