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Monsanto’s takeover offer needs to reflect fair price, says Syngenta chairman

June 23, 2015
Chemical Value Chain
Syngenta’s chairman Michel Demaré on Tuesday said that future takeover proposals from Monsanto need to be at a fair price and provide a high degree of certainty that such a deal would clear antitrust hurdles. Demaré, in a newly-released video, confirmed Syngenta’s opposition to Monsanto’s current proposal. Speaking ahead of Monsanto’s third-quarter earnings on Wednesday when it is expected to talk about the proposed combination of the two companies, Demaré said that Syngenta would consider future proposals but only if they fulfilled certain requirements. “A serious proposal to buy Syngenta has to be made at full and fair value. It has to recognize for shareholder the inherent combination benefits. And it has to provide a high degree of certainty that the transaction will be closed, including compensation in case the deal fails, be it for antitrust reasons or any other reasons,” Demaré said.
 
Syngenta in May turned down Monsanto’s takeover approach on the grounds of it being too low and not addressing antitrust concerns. Monsanto has since offered to pay Syngenta $2 billion if the takeover fails on antitrust grounds. Demaré called the second proposal  “a copy-paste of the first proposal” and said that the sheer size of Monsanto’s proposed disposal package would be highly disruptive for Syngenta. “How can we on one hand continue to market our integrated offers to our farmers whilst at the same time start to dismantle this integrated strategy across the world? This would have huge commercial and organizational consequences for Syngenta…and we really don’t believe that a break fee of $2 billion is going to even start to mitigate these impacts.”
 
Demaré is also skeptical about the possibility of a UK domicile of a combined company and tax inversion. Syngenta and its legacy companies have been in Basel for 250 years, he says. “We have a great relationship with the local government and our shareholders today enjoy 100% of the benefits coming from the very competitive tax rates that we enjoy in Basel. So I have a hard time to see how a UK setup could be more competitive and especially for shareholders.”
 
By Natasha Alperowicz
 

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