Farming News - Monsanto seeks to ease regulatory risk ahead of Syngenta takeover

Monsanto seeks to ease regulatory risk ahead of Syngenta takeover


Monsanto has made concessions that would help allay anti-trust issues, if it were to go ahead with a buyout of Swiss competitor Syngenta.

Over the past years, Syngenta - the world’s largest agri-chemical manufacturer - has rejected two takeover bids by Monsanto - the leading seed and GM crop company - most recently an offer of $45bn (£29bn) at the beginning of May.  

On Wednesday, Monsanto’s President Brett Bergmann announced a series of commitments, made in response to consultations with legal and financial advisors to address regulatory concerns that have been raised by the prospective takeover. One of the reasons Syngenta gave for rejecting Monsanto’s latest offer in early may was the potential for anti-trust complications to arrive; the Basel-based company said at the time that Monsanto’s offer “Underestimates the significant execution risks, including regulatory and public scrutiny at multiple levels in many countries.”

Monsanto’s Brettmann said that, if Monsanto successfully acquires Syngenta, it would divest all of the Swiss agribusinesses seeds and traits assets, as well as certain overlapping chemistry assets. This, Brettmann said would vastly improve Monsanto’s position, whilst "enabling continued choice in the seed industry.”

The Monsanto President said on Wednesday that the company is committed to making a "really clean deal” to avoid all regulatory concerns.

However, Syngenta’s concerns persist. A spokesperson told Reuters, "The regulatory hurdles are more challenging than implied by the announcement," in response to Brettmann’s statment.

A merger between the two companies would likely lead to opposition from environment groups, but also potentially from farming organisations, who, despite Monsanto’s promise that its acquisition would “Offer farmers an integrated solution set across a broader set of crops, geographies and production practices” worry that a takeover could lead to higher prices for agricultural inputs.