Monsanto-Syngenta Mega-Merger Would Drive More Deals: Real M&A
2015-05-01 22:18:34.292 GMT
(For a Real M&A column news alert: {SALT REALMNA <GO>}.)
By Brooke Sutherland
(Bloomberg) -- A combination of Monsanto Co. and Syngenta
AG would set the stage for even more mergers and acquisitions.
Monsanto has approached Syngenta about a takeover that
would create a giant in the market for seeds and crop chemicals
with more than $30 billion in revenue. Getting a deal approved
by regulators won’t be easy -- and may not happen at all. To
address antitrust issues and help its case, Monsanto has planned
for a deal to include a sale of parts of the combined business,
a person familiar with the matter has said.
The biggest concerns may be tied to what would be an
unprecedented market share in soybeans and corn seeds for the
combined company. Syngenta’s operations in those areas would
appeal to a range of buyers from Dow Chemical Co. to BASF SE and
Bayer AG, said Colin Isaac of Atlantic Equities LLP. Even
private-equity firms could look.
Syngenta’s “seed businesses would be pretty easy to sell
for good multiples,” Isaac, a London-based analyst, said in a
phone interview. “People are always looking to buy share.”
DuPont Co. could also be a buyer of any assets that are
divested, said Bill Selesky, an analyst at Argus Research Co.
Dupont-Dow
There is another possibility: At Dow, activist investor Dan
Loeb once pushed for a breakup, and Chief Executive Officer
Andrew Liveris has suggested the company is open to divesting
its agriculture unit. Monsanto becoming a much stronger
competitor could be a catalyst for the $60 billion company to
more seriously consider taking that step, said James Sheehan of
SunTrust Banks Inc. That segment would be prime pickings for
DuPont and its Pioneer seed business, he said.
“That’s the deal that I’ve always expected to happen,”
Isaac of Atlantic Equities said in a phone interview. “It’s
attractive for Pioneer and it’s attractive for Dow in terms of
focusing their portfolio on the chemicals business and raising a
lot of cash.”
If Dow doesn’t want to sell directly to DuPont, both
companies could combine their agriculture businesses in a
separate entity, Argus’ Selesky said.
For Related News and Information:
Monsanto Still Has Heart Set on Biggest Chemical Deal: Real M&A
No Monsanto, No Problem for Syngenta on Path to Deal: Real M&A
Dow Chemical Breakup Is Better Than Status Quo: Real M&A
DuPont’s $5 Billion Gain Undercuts Peltz Breakup Plan: Real M&A
Top deal news: DTOP <GO>
Real M&A columns: NI REALMNA <GO>
To contact the reporter on this story:
Brooke Sutherland in New York at +1-212-617-0448 or
bsutherland7@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman
2015-05-01 22:18:34.292 GMT
(For a Real M&A column news alert: {SALT REALMNA <GO>}.)
By Brooke Sutherland
(Bloomberg) -- A combination of Monsanto Co. and Syngenta
AG would set the stage for even more mergers and acquisitions.
Monsanto has approached Syngenta about a takeover that
would create a giant in the market for seeds and crop chemicals
with more than $30 billion in revenue. Getting a deal approved
by regulators won’t be easy -- and may not happen at all. To
address antitrust issues and help its case, Monsanto has planned
for a deal to include a sale of parts of the combined business,
a person familiar with the matter has said.
The biggest concerns may be tied to what would be an
unprecedented market share in soybeans and corn seeds for the
combined company. Syngenta’s operations in those areas would
appeal to a range of buyers from Dow Chemical Co. to BASF SE and
Bayer AG, said Colin Isaac of Atlantic Equities LLP. Even
private-equity firms could look.
Syngenta’s “seed businesses would be pretty easy to sell
for good multiples,” Isaac, a London-based analyst, said in a
phone interview. “People are always looking to buy share.”
DuPont Co. could also be a buyer of any assets that are
divested, said Bill Selesky, an analyst at Argus Research Co.
Dupont-Dow
There is another possibility: At Dow, activist investor Dan
Loeb once pushed for a breakup, and Chief Executive Officer
Andrew Liveris has suggested the company is open to divesting
its agriculture unit. Monsanto becoming a much stronger
competitor could be a catalyst for the $60 billion company to
more seriously consider taking that step, said James Sheehan of
SunTrust Banks Inc. That segment would be prime pickings for
DuPont and its Pioneer seed business, he said.
“That’s the deal that I’ve always expected to happen,”
Isaac of Atlantic Equities said in a phone interview. “It’s
attractive for Pioneer and it’s attractive for Dow in terms of
focusing their portfolio on the chemicals business and raising a
lot of cash.”
If Dow doesn’t want to sell directly to DuPont, both
companies could combine their agriculture businesses in a
separate entity, Argus’ Selesky said.
For Related News and Information:
Monsanto Still Has Heart Set on Biggest Chemical Deal: Real M&A
No Monsanto, No Problem for Syngenta on Path to Deal: Real M&A
Dow Chemical Breakup Is Better Than Status Quo: Real M&A
DuPont’s $5 Billion Gain Undercuts Peltz Breakup Plan: Real M&A
Top deal news: DTOP <GO>
Real M&A columns: NI REALMNA <GO>
To contact the reporter on this story:
Brooke Sutherland in New York at +1-212-617-0448 or
bsutherland7@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman