The Cat & Mouse Game Between Syngenta And Monsanto Begins

Last week, I talked about how two crop protection industry giants, Syngenta and Monsanto, had engaged in some acquisition discussions. Not long after that, Syngenta issued a formal statement to the world on this effort, saying that its board had rejected the Monsanto offer “as it is not in the best interests of Syngenta, its shareholders and stakeholders. The offer fundamentally undervalues Syngenta’s prospects.” The statement then went on to talk about Syngenta’s recent cost savings measures and the company’s outlook for the next three years.

In some people’s minds, this might signal the end of the Monsanto-Syngenta merger game. However, if you read between the lines a bit, this might only be the first phase of a broader dialogue.

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How long will the buyout talk between Syngenta and Monsanto go on?

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First off, there’s the headline accompanying the statement: “Syngenta Statement On Unsolicited Preliminary Approach From Monsanto.” The key here is the word “preliminary,” as in first. This seems to anticipate some kind of next offer be coming in the very near future.

That’s what was in the statement. What was missing was any kind of paragraph saying Syngenta would fight any attempt by Monsanto to buy up its company. In the past, when a truly hostile takeover has started, the company being targeted for acquisition usually publicly decries such tactics and vows to fight the attempt “tooth and nail.” This was conspicuously missing from the release.

So, in the end, this will probably boil down to how much Monsanto can sweeten its offer for Syngenta (i.e., how many more zeros will be added to the buyout amount). This probably means the game of cat and mouse between these two companies over combining will go on for many months to come.

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