Monsanto, Syngenta Said to Discuss Regulatory Hurdles to Deal
2015-06-02 20:50:41.933 GMT
By Ed Hammond, Aaron Kirchfeld and Jeffrey McCracken
(Bloomberg) -- Monsanto Co., the world’s largest seed
company, is quietly working with Syngenta AG to iron out
regulatory concerns that could stymie its proposed takeover of
its Swiss rival, people with knowledge of the situation said.
Antitrust lawyers for the two companies are discussing how
to address regulatory hurdles that would arise from the
combination, said the people, who asked not to be identified
because the talks are private. The efforts don’t guarantee that
Monsanto will raise its offer or that an agreement will be
reached, the people said.
Syngenta would consider entering formal negotiations if
Monsanto sufficiently raises its offer and provides a
multibillion-dollar termination fee to compensate for the risks
of completing a deal, said the people.
The Swiss firm considers something around 10 percent of the
purchase price, which would amount to $4.5 billion at the
current bid, as reasonable, one of the people said, though no
concrete amount has been set. That type of fee is usually 3
percent to 5 percent of the offer price.
A spokesman for St. Louis-based Monsanto declined to
comment on the talks, while a representative for Basel,
Switzerland-based Syngenta declined to comment on speculation.
Syngenta, which snubbed Monsanto’s offer of 449 francs a
share because it deemed it too low and the execution risk too
high, may be willing to consider a bid of at least 500 francs a
share, a person familiar with the matter said last week.
More Cash
The Swiss company would also like Monsanto to increase the
portion of cash versus stock in the offer to minimize the risk
of the U.S. company’s shares declining in value as they seek
approval for the deal, one of the people said. Monsanto’s
proposal offered 45 percent in cash, according to a Syngenta
statement last month.
Syngenta is of the opinion that Monsanto is underestimating
the raft of competitive, social and political opposition from
regulators, politicians and farmers to a deal to merge the
world’s top genetically modified crop supplier with the No. 1
agrochemical maker, the people said.
Monsanto has said publicly that it would sell Syngenta’s
conventional and genetically modified seed businesses were it to
succeed in its takeover. Selling the seeds unit plus some
herbicide businesses could generate $8 billion, according to a
note from Deutsche Bank AG.
For Related News and Information:
Monsanto Says Deal Would Mean Sale of Syngenta Seed Unit
Monsanto M&A Bid Structure Could Beat Treasury’s Inversion Plan
Top Stories:TOP<GO>
For industrial news in Europe:TNI MAC EUROPE <GO>
--With assistance from Andrew Noël and Dinesh Nair in London.
To contact the reporters on this story:
Ed Hammond in New York at +1-212-617-1963 or
ehammond12@bloomberg.net;
Aaron Kirchfeld in London at +44-20-3525-8830 or
akirchfeld@bloomberg.net;
Jeffrey McCracken in New York at +1-212-617-8517 or
jmccracken3@bloomberg.net
To contact the editors responsible for this story:
Aaron Kirchfeld at +44-20-3525-8830 or
akirchfeld@bloomberg.net;
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net
Elizabeth Wollman, Simon Casey
2015-06-02 20:50:41.933 GMT
By Ed Hammond, Aaron Kirchfeld and Jeffrey McCracken
(Bloomberg) -- Monsanto Co., the world’s largest seed
company, is quietly working with Syngenta AG to iron out
regulatory concerns that could stymie its proposed takeover of
its Swiss rival, people with knowledge of the situation said.
Antitrust lawyers for the two companies are discussing how
to address regulatory hurdles that would arise from the
combination, said the people, who asked not to be identified
because the talks are private. The efforts don’t guarantee that
Monsanto will raise its offer or that an agreement will be
reached, the people said.
Syngenta would consider entering formal negotiations if
Monsanto sufficiently raises its offer and provides a
multibillion-dollar termination fee to compensate for the risks
of completing a deal, said the people.
The Swiss firm considers something around 10 percent of the
purchase price, which would amount to $4.5 billion at the
current bid, as reasonable, one of the people said, though no
concrete amount has been set. That type of fee is usually 3
percent to 5 percent of the offer price.
A spokesman for St. Louis-based Monsanto declined to
comment on the talks, while a representative for Basel,
Switzerland-based Syngenta declined to comment on speculation.
Syngenta, which snubbed Monsanto’s offer of 449 francs a
share because it deemed it too low and the execution risk too
high, may be willing to consider a bid of at least 500 francs a
share, a person familiar with the matter said last week.
More Cash
The Swiss company would also like Monsanto to increase the
portion of cash versus stock in the offer to minimize the risk
of the U.S. company’s shares declining in value as they seek
approval for the deal, one of the people said. Monsanto’s
proposal offered 45 percent in cash, according to a Syngenta
statement last month.
Syngenta is of the opinion that Monsanto is underestimating
the raft of competitive, social and political opposition from
regulators, politicians and farmers to a deal to merge the
world’s top genetically modified crop supplier with the No. 1
agrochemical maker, the people said.
Monsanto has said publicly that it would sell Syngenta’s
conventional and genetically modified seed businesses were it to
succeed in its takeover. Selling the seeds unit plus some
herbicide businesses could generate $8 billion, according to a
note from Deutsche Bank AG.
For Related News and Information:
Monsanto Says Deal Would Mean Sale of Syngenta Seed Unit
Monsanto M&A Bid Structure Could Beat Treasury’s Inversion Plan
Top Stories:TOP<GO>
For industrial news in Europe:TNI MAC EUROPE <GO>
--With assistance from Andrew Noël and Dinesh Nair in London.
To contact the reporters on this story:
Ed Hammond in New York at +1-212-617-1963 or
ehammond12@bloomberg.net;
Aaron Kirchfeld in London at +44-20-3525-8830 or
akirchfeld@bloomberg.net;
Jeffrey McCracken in New York at +1-212-617-8517 or
jmccracken3@bloomberg.net
To contact the editors responsible for this story:
Aaron Kirchfeld at +44-20-3525-8830 or
akirchfeld@bloomberg.net;
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net
Elizabeth Wollman, Simon Casey