Dive Brief:
- Monsanto Co. CEO Hugh Grant said he remains an optimist as to the outcome of the company's proposal to acquire Syngenta AG, a process Grant refers to as "a long game," in an interview with The Wall Street Journal,
- This is despite repeated rebuffs of Monsanto's offers by Syngenta, which most recently reiterated its decline of the offer earlier this week when Monsanto approached Syngenta shareholders in Europe directly.
- "Mr. Grant said Monsanto’s pursuit of Syngenta could play out over several months. If no deal materializes—though Mr. Grant said he’s confident it will—Monsanto remains committed to expanding in pesticides," according to The Wall Street Journal.
Dive Insight:
Earlier today, Syngenta chairman Michel Demaré released a YouTube video outlining criteria that must be abided by if anyone is in hopes that Syngenta will consider Monsanto's takeover offer as "serious," The New York Times reported.
"A serious proposal to buy Syngenta has to be made at full and fair value. It has to recognize for shareholders the inherent combination benefits," Demaré said in the video. He continued, "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 reason or any other reasons. Absent these parameters, I think the board would be irresponsible to even accept to negotiate under such terms."
Reuters reported earlier today that Syngenta will also now round up investors' opinions as to whether and how to proceed with Monsanto's offer and the terms they are willing to accept for such a deal.
All the latest news flying around the potential Monsanto-Syngenta deal comes just before Monsanto's latest earnings report, set to be released tomorrow. Some analysts are confused by the bid proposal in general, as they say there is no guarantee for revenue or profits commensurate to the amount Monsanto might pay to acquire Syngenta.
These analysts say increased revenue and profits are needed at this time, when shares are down 4% on the year and 6% on the last 12 months and sales for seeds and its chief product Roundup are on the decline. According to these analysts, mergers and acquisitions may be the right strategy, but Syngenta may not be the way to go. Instead, they believe Monsanto should wait it out and offset some of the sales strains, such as Roundup's double-digit decreases, with rising soybean sales, which are increasing at annual rates above 30%.