Dive Brief:
- Syngenta has turned down a $45 billion takeover proposal by Monsanto.
- Syngenta's reasoning for the rejection was an undervalued worth of its company and the fact that the proper regulatory risks were not considered as they should have been.
- Monsanto is likely motivated to take over the company to build a presence in Switzerland and pay lower taxes, according to a Reuters source.
Dive Insight:
Monsanto sees other key reasons why Syngenta would make a smart takeover. According to Reuters, "Monsanto foresees strong benefits from a takeover of Syngenta, which makes heavy research and development (R&D) investments in crop technology to increase the average productivity of crops such as corn, soybeans, sugar cane and cereals."
This move should come as no surprise as genetically modified seeds companies are likely rejoicing over recent regulations that now enable more potential GMO foods in the European Union. Monsanto produces the only GMO product currently approved for farming there, a form of genetically-modified maize, Reuters reports. The EU also recently added 10 new crops to its list of permitted GMO crop imports.