Fri, May 22, 6:15 PM
- Monsanto's (NYSE:MON) efforts to try to take over Syngenta (NYSE:SYT) could spark a selloff or de-emphasis of its glyphosate product line that last year brought in ~$5B, or a third of total MON's revenues, industry sources tell Reuters.
- The key ingredient in MON's popular Roundup herbicide is glyphosate, the world's most widely used weed-killing agent, but its heavy use has led to high levels of weed resistance, and rivals have been developing alternative herbicide options.
- A move away from glyphosate would make sense for MON, a Piper Jaffray analyst says, since "as resistance continues to grow with glyphosate, the value of that product is likely going to decline."
- Executive VP for global strategy Kerry Preete told investors earlier this week that in addition to selling off SYT's seeds and traits business to make the acquisition work, MON is open to selling "certain overlapping crop protection chemical assets that exist."
Wed, May 20, 10:16 AM
- Monsanto (MON -0.9%) elaborates on its proposed acquisition of Syngenta (SYT +2.3%), saying it is committed to divesting SYT's entire seed business to win regulatory approval for a merger.
- The deal also would include the sale of some overlapping chemical operations, MON says in a statement ahead of an investor presentation by COO Brett Begemann.
- MON says the combination of the two companies would create substantial cost savings, enhance research and development, and offer farmers a more diverse range of products and services.
- For its part, SYT reiterates that MON's proposal "fundamentally undervalues" its prospects and pipeline, and that MON's latest assurances were already considered and rejected by SYT's board.
Thu, May 14, 3:05 PM
- Monsanto (MON +1.7%) is trying to line up buyers for assets worth up to $8B to appease regulators before making a new takeover approach for Syngenta (SYT +1.7%), possibly within three weeks, Reuters reports, citing industry sources.
- MON reportedly will tap Germany's BASF (OTCQX:BASFY, OTCPK:BFFAF), an existing joint venture partner, as it seeks a buyer for SYT's U.S. seeds business, which cannot be part of its proposed takeover.
- SYT's seeds business could be worth $6B-$8B, and likely would need to be sold because authorities are expected to block MON from adding to its dominance of the U.S. soy and corn seeds market.
Tue, May 12, 2:55 PM
- Syngenta (SYT +1.2%) is upgraded to Market Perform from Underperform at Bernstein, which expects Monsanto (MON -1.4%) to come back with a higher bid for the company.
- Synergies would have to be very high - at $2B - for a merger to prove accretive, Bernstein says, but it is "easy" with low-cost debt financing to make the deal cash accretive by 2018 with a purchase price up to $55B/share, and MON has the necessary balance sheet capacity.
- Bernstein also sees various risks associated with the success of a MOS-SYT combination, such as culture clashes between the very American MON and a more globally oriented SYT, as well as the impact of public opinion and regulatory requirements.
Fri, May 8, 6:10 PM
- Wells Fargo’s analysts do not share the market’s enthusiasm for Monsanto's (NYSE:MON) $45B offer for Syngenta (NYSE:SYT), downgrading MON to Market Perform from Outperform and lowering their valuation range by $10 to $125-$130 to reflect what they see as risks in the deal.
- The analysts write that with MON trading at 22x and SYT at 18x, the deal could cause MON to drop its valuation premium due to the commoditization of its portfolio: “Is offering 3x sales or a 35%-plus premium for SYT worth it? We think not, and are using the recent spike as an opportunity to move to the sidelines and see how this plays out.”
- Citigroup’s P.J. Juvekar also expresses surprise at the deal, as MON has a fine track record of winning market share and R&D partnerships, and a transformational acquisition could risk that focus.
Fri, May 8, 2:53 PM
- Major investors in Syngenta (SYT +11.7%) are confident a deal with Monsanto (MON +1.6%) will happen if the U.S. company raises its initial $45B bid by at least 10%, Reuters reports.
- "A full cash offer at 450 francs or a 50/50 stock and cash offer at 500 francs would suit us at first sight, [but] we will deepen our analysis in the coming days," a top SYT investor reportedly says.
- Despite having some unique assets, SYT's management had "over-promised and under-delivered," so a deal would be welcome as long as the price got closer to 500 Swiss francs, according to another investor.
- The two biggest SYT investors are asset managers BlackRock and Capital Research Global Investors, both with a combined stake across their various funds of ~5%; at a fund level, the biggest investor is the Harbor International Fund, which holds a 2.7% stake.
Fri, May 8, 12:25 PM
- Monsanto’s (MON +2.3%) rejected $45B bid for Syngenta (SYT +9.7%) forces the suitor to ask itself the same hard question as disappointed shareholders of the target company: Is Syngenta worth more?
- Deutsche Bank's Virginie Boucher-Ferte believes the deal likely will get done but at a higher price and/or a higher cash component in order to better take into account the execution risk.
- Even at 500 Swiss francs/share vs. the current 449 Swiss francs/share offer, the analyst thinks the deal would be earnings accretive for MON due to the significant synergy potential, low interest rates, and the low Swiss corporate tax rate which would benefit MON.
- Regulatory risks are "not insurmountable," Boucher-Ferte says, noting SYT's relatively small 8% global market share in seeds.
Fri, May 8, 10:15 AM
- Monsanto (MON +3.8%) confirms it has offered a takeover deal for Syngenta (SYT +12.1%) which it believes would deliver "significant value to shareholders of both companies" and generate "substantial synergies."
- Monsanto says it made a private proposal to SYT's board to acquire the company for 449 Swiss francs per share, including ~45% cash.
- MON also says it is confident in its ability to obtain all necessary regulatory approvals for a takeover.
- SYT rejected MON's offer in a statement that said it undervalues the company.
Fri, May 8, 9:16 AM| 4 Comments
Fri, May 8, 2:51 AM
- Syngenta (NYSE:SYT) has rejected an unsolicited $45B takeover offer from Monsanto (NYSE:MON), saying it undervalued the company and a merger would carry significant risks.
- Monsanto offered to acquire the company at a price of 449 Swiss francs per Syngenta share, with approximately 45% in cash.
- Previously: Monsanto, Syngenta hire U.S. banks to advise on possible takeover (May. 07 2015)
- Previously: Monsanto approaches Syngenta again about a takeover (Apr. 30 2015)
Thu, May 7, 4:15 PM
- Syngenta (SYT +6.1%) spiked into the close following a Reuters report that the company is working with Goldman Sachs to assess the merits of a potential takeover deal by Monsanto (MON +2.4%), which is said to have hired Morgan Stanley as its adviser.
- MON long has been interested in SYT and the potential to base itself in Switzerland and benefit from lower taxes, but with the U.S. attempting to clamp down on such tax inversion deals, MON may have to buy SYT in a cash rather than stock transaction and would be unable to redomicile in Switzerland - a tall order that could require the need of a partner before launching a takeover bid that could cost as much as $40B.
- MON approached SYT last year about some sort of combination, and rumors of talks between the two have picked up in the past week.
Mon, May 4, 6:35 PM
- Syngenta (NYSE:SYT) fell 7.6% in today's trade, giving up some but not all of its 16% gain on Friday that was sparked by talk that Monsanto (NYSE:MON) had approached the company about a takeover.
- The biggest concern for regulatory approval may involve what would be an unprecedented market share in soybeans and corn seeds for the combined company, and analysts say SYT’s operations in those areas would appeal to a range of buyers including Dow Chemical (NYSE:DOW), DuPont (NYSE:DD), BASF (OTCQX:BASFY, OTCPK:BFFAF) and Bayer (OTCPK:BAYZF, OTCPK:BAYRY).
- Colin Isaac of Atlantic Equities says the deal he always expected to happen is a DuPont purchase of Dow's agriculture unit; CEO Andrew Liveris has suggested Dow is open to divesting the unit, and MON's becoming a much stronger competitor after an SYT takeover could be a catalyst for Dow to more seriously consider exiting the business, which Issac says would be prime pickings for DuPont and its Pioneer seed business.
- A $19.5B bid by DuPont for Dow’s ag sciences business could generate a 7% return on invested capital, according to a report by Laurence Alexander at Jefferies, while adding that such a move is less likely until agricultural markets improve from current trough levels.
Mon, May 4, 9:16 AM
Fri, May 1, 12:45 PM
Fri, May 1, 9:13 AM
Fri, May 1, 7:59 AM
- Antitrust issues regarding a potential Monsanto (NYSE:MON) and Syngenta (NYSE:SYT) combination would "not be insurmountable," Deutsche Bank analysts say, following reports late yesterday that MON again has approached SYT about a takeover.
- Although MON is no. 1 globally in seeds and SYN is no. 3, SYT’s market share is relatively small at 8% vs. MON's 25%, the firm says; SYT's seeds business is perceived as the weak spot after recent problems in its U.S. corn business, the firm says, so the market would not see a problem if some of SYT’s seeds assets had to be divested as a prerequisite for a deal.
- SYT +16%, MON +3.6% premarket.
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Syngenta AG is involved in the discovery, development, manufacturing and marketing of products designed to improve crop yields and food quality.The Company is also engaged in the lawn and garden business.
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