Monsanto revises offer, but Syngenta rejects it also

Monsanto Company reaffirmed its commitment to a constructive process to negotiate a mutually beneficial combination as part of the company's proposal to combine with Syngenta in a cash and stock transaction valued at 449 CHF per share. Monsanto's proposal would provide Syngenta shareholders with a substantial premium of more than 43 percent over the 314 CHF unaffected share price on April 30, 2015 and a more than 45 percent premium to Syngenta's 52 week volume weighted average share price, as well as significant further value creation through ongoing ownership in the combined company. Monsanto has proposed to Syngenta a new $2 billion reverse break-up fee payable by Monsanto if it is unable to obtain necessary global regulatory approvals.

"We're encouraged by the reaction to our proposal from our respective shareowners, customers and other stakeholders, said Hugh Grant, Monsanto chairman and CEO. "It is disappointing that Syngenta has not engaged in substantive discussions about the many benefits of this combination, including the benefits for farmers around the world. We remain committed to unlocking the opportunity of this combination and pursuing constructive conversation with Syngenta's management and board. Monsanto devoted significant time and resources analyzing the potential combination with Syngenta, and we are confident in our ability to obtain all necessary regulatory approvals. We've backed our confidence by agreeing to divest overlapping businesses and offered a $2 billion reverse break-up fee to further demonstrate our commitment to this combination.

Monsanto reiterated that the combined strengths of both companies will accelerate innovation and increase choice for farmers around the world, unlock enhanced scale and reach, and provide the opportunity to offer farmers integrated solutions across a broader set of crops, geographies and production practices.

"Combining Monsanto's global seeds, traits and information technology capabilities with Syngenta's global position in crop protection chemicals will create significant value for growers to ultimately meet the needs of broader society, Grant added.

Additional materials supporting the strategic rationale and benefits of the proposed transaction are available on Monsanto's website at   

Syngenta responded negativley to Monsanto's latest takeover attempt with a letter to its shareholders.

Dear Shareholders and other Stakeholders,

On June 6, Syngenta received a second letter from Monsanto which essentially repeated their first proposal of April 18. The only change by Monsanto is to add a wholly inadequate reverse regulatory break fee.

In the interest of transparency, we are attaching this letter in addition to Monsanto's first letter of April 18 and our rejection letter of April 30.

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.

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 in 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.

In order to evaluate this issue as fully as possible, the respective outside counsel of Syngenta and Monsanto met on three separate occasions, subsequent to our rejection letter, to discuss in good faith the regulatory challenges.

These meetings have reinforced Syngenta's assessment of the regulatory risks and Monsanto has made no attempt to seriously address these concerns. Monsanto continues to gloss over these fundamental transaction risks.

Syngenta as a standalone company, with a broad crop protection, seeds and traits portfolio and four years' experience of integration, is already delivering integrated technology on a global basis.

The Company is also at the start of a significant upturn in innovation with the first successes already registered in 2014. This, coupled with our Accelerating Operational Leverage program, underpins our confidence in achieving our target of a 24-26% EBITDA margin in 2018.

Yours sincerely,
Michel Demaré, Chairman Mike Mack, Chief Executive Officer


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