Swiss multinational Syngenta (VTX: SYNN) has rejected a second take over proposal from agrochemical giant Monsanto. 

Just a few weeks after Syngenta rejected an initial US$45 billion bid from the U.S. company, it received a second letter from Monsanto on June 6 which it said 'essentially repeated' the first proposal of April 18.

"Monsanto's second letter represents the same inadequate price, same inadequate regulatory undertakings to close, same regulatory risks and same issues associated with dual headquarters' moves. As such, we have reiterated our prior rejection of Monsanto's proposal," a release says.

Monsanto has offered to pay a US$2 billion reverse break-up fee to Syngenta if it can't get global regulatory approvals for an acquisition.

"In particular Syngenta notes that if a transaction were to be announced and not consummated, there would be significant harm and value destruction for Syngenta and its shareholders, which requires a careful assessment of all risks and a clear path to closing, and is on no way adequately addressed by a paltry reverse regulatory break fee relative to such fees seen in transactions with comparable levels of regulatory risk.

"Further, Syngenta's Board, in conjunction with its legal advisors, does not think the regulatory issues are resolved as simply as by a pre-agreed and pre-announced package of horizontal divestitures, which is Monsanto's proposed approach.

"There are notable examples of proposed transactions that have been blocked by regulators due to 'conglomerate concerns' and other non-horizontal issues and the Board has concern that a combination between Monsanto and Syngenta may be viewed as such."

Last week, news agency Reuters reported unnamed sources said German chemicals group BASF SE was speaking to investment bankers about the possibility of an offer for Syngenta.

Photo: Syngenta

www.freshfruitportal.com