St. Louis / MO. (moc) While Monsanto Company continues to believe a combination with Swiss Syngenta would have created tremendous value for shareowners of both companies and farmers, Syngenta has communicated that Monsanto’s enhanced proposal did not meet Syngenta’s financial expectations. Without a basis for constructive engagement from Syngenta, Monsanto will continue to focus on its growth opportunities built on its existing core business to deliver the next wave of transformational solutions for agriculture.
Monsanto confirmed it communicated a revised proposal on August 18 to Syngenta to combine the two companies. The enhanced proposal, subject to due diligence and other customary conditions, included a number of elements including the following:
- Monsanto’s new proposal increased the cash component of the proposed transaction to 245 CHF per share. The proposal also maintained the same number of shares as in its April proposal, providing Syngenta shareowners with an approximate 30 percent ownership in the new company. Based on Monsanto’s share price and currency exchange rates at the time, the revised proposal translated to a value of 470 CHF per share.
- Given the confidence the transaction would close and to provide additional protection from closing risk, the proposal increased the reverse break-up fee to three billion USD. The reverse break-up fee would have been payable by Monsanto if it would have been unable to obtain necessary global regulatory approvals.
The shareowners of the combined company would have benefited from substantial synergies, significant cash EPS accretion and attractive ROIC, as well as a responsible capital structure.
Focus on Monsanto’s Growth Opportunities
Monsanto will continue its focus on opportunities within its existing core business and resume the implementation of its approved share repurchase program as soon as practical. In addition, Monsanto management confirmed its confidence in delivering its five-year plan to more than double fiscal-year 2014 ongoing earnings per share by 2019.
Monsanto remains the best positioned to drive a comprehensive integrated strategy, with industry-leading assets in breeding, biotechnology, data science, next-generation biologicals, and multiple options to build on its existing crop protection portfolio.