Will Monsanto And Syngenta Combine This Time?

Under the heading of “never say never,” it sounds as if crop protection/seed giants Monsanto Co. and Syngenta are once again entertaining the idea of merging their businesses. As you might recall, the two companies briefly discussed combining their operations during 2014 until Syngenta’s management reportedly decided against continuing with any formal negotiations.

But with the 2015 agricultural season in the U.S. in full swing (and most analysts predicting a less robust economic environment for agriculture compared with prior years), market watchers are reporting that the two companies are once again talking marriage. At present, Basel, Switzerland-based Syngenta is the world’s largest maker of crop protection products. Meanwhile, St. Louis, MO-based Monsanto is the largest provider of seed. If combined, Monsanto/Syngenta would become the world’s largest company for both seeds and crop protection products, easily rivaling Bayer, BASF and Dow.

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Of course, there are still obstacles to such a union taking place. Because of large business overlaps in such markets as North and Latin America, government regulators on both sides of the Atlantic Ocean might attempt to block such a merger on antitrust concerns. However, Monsanto has reportedly planned for any Syngenta deal to include strategic business divestitures to address these issues.

In addition, U.S. regulators could look negatively at a Monsanto/Syngenta merger if Monsanto decides to move its tax location from America to Switzerland, known as an inversion, to save on the company’s annual tax bill.

For now, however, everything regarding this deal is purely in the realm of speculation (with either company formally commenting one way or the other). But for those who keep tabs on the agricultural marketplace, this rumor definitely bears following . . .

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