Dive Brief:
- Syngenta AG reported a 12% sales dip for the third quarter due to problems in the Latin America markets and the strength of the dollar. The company also warned that its 2015 earnings would slip as a result.
- After moving on from an attempted takeover by rival Monsanto Co., Syngenta is refocusing its efforts on its business in Latin America, according to Syngenta CEO Mike Mack. The company also announced it's acquiring Ag Connections.
- Shareholders have been vocal about their disapproval of Syngenta's rejection of Monsanto, and shares have plummeted in value since.
Dive Insight:
"Syngenta’s management is now even more under pressure to prove that they are able to create value for the shareholder after Monsanto walked away," Markus Baechtold at Luzerner Kantonalbank, which is invested in Syngenta, told The Wall Street Journal.
In response, Syngenta management is making moves to prove value for shareholders, including the divestment of its vegetable seeds and flower seeds units as well as a $2 billion buyback.
"The flower and vegetable seed businesses have already attracted more than 10 interested parties and preliminary bids will be sought in the first quarter, Chief Financial Officer John Ramsay said in an interview Thursday. The vegetable seed unit could fetch more than $2.5 billion, analysts at Bernstein have estimated," according to Bloomberg.
Syngenta isn't the only industry competitor facing difficulties right now. Monsanto announced earlier this month that it would be cutting 2,600 jobs after sales dropped in the most recent quarter.
Also, "Rival DuPont this month cut its full-year operating profit forecast by 11 percent, citing weak pesticides and seeds demand in Brazil," Reuters reported.