Syngenta rejects Monsanto’s $45bn takeover offer

Agrochemicals company Syngenta has rejected a takeover bid of $45bn from US-based sustainable agriculture company Monsanto.

Syngenta said that after a review of Monsanto’s offer it reached the conclusion that it was not in the company’s best interest, as it undervalued Syngenta’s prospects and underestimates significant execution risks.

Monsanto had put forward an offer of buying Syngenta’s shares at a price of $486.35 per share.

Syngenta chairman Michel Demaré said: "Syngenta is the world leader in crop protection, the number three in seeds and the first company to introduce integrated solutions for growers.

"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."

According to Reuters, Monsanto has long shown an interest in buying Syngenta to create a base for itself in Switzerland to benefit from lower taxes.

Demaré further added that short-term currency and commodity price movements had affected Syngenta’s valuation. However, it also added that emerging markets were responsible for over 50% of their sales.

"In 2015, we are on track to achieve the first $265m of savings from our Accelerating Operational Leverage Program, and we are targeting savings of $1bn in 2018. This will allow us to realise the full benefits of the integrated strategy and will ensure that increases in profitability are sustained for the benefit of Syngenta’s shareholders.

"Recently launched new products are achieving rapid sales growth globally as growers demand the latest technologies, and we have a strong pipeline of innovative crop protection products in development, which have total peak sales potential of over $3bn," said Demaré.