Syngenta plays coy with numerous suitors

Crops are a big - but volatile - business at present. Keystone

Swiss agricultural technology firm Syngenta will not be sold cheaply to competitors despite the current consolidation pressures in the volatile market, the company’s bosses said in a newspaper interview on Wednesday.

Basel-based Syngenta, which specialises in pesticides and genetically modified seeds, has been courted by several larger companies – most notably Monsanto. The United States firm has put in several bids for Syngenta over the past few years and is rumoured to be preparing another offer.

Syngenta has so far resisted takeover attempts despite some analysts believing the most recent offer from Monsanto – CHF470 ($460) per share – to be fairly priced. Syngenta chairman Michel Demaré and chief financial officer John Ramsay told the Tages-Anzeiger newspaper that other considerations, such as the likelihood of regulatory difficulties surrounding a merger and differences in company culture, had also hindered the deal.

“It’s true that there have been a lot of tensions with Monsanto over the past few years and that has to be taken into consideration,” Demaré said.

Changing landscape

But Demaré and Ramsay recognised that takeovers and mergers would probably play a large role in the changing landscape for the industry in the next few years.

The executives said the company wanted to play an “active role” in the merger scene, either by driving the best deal for Syngenta shareholders in the event of a takeover or by buying up attractive research facilities of smaller firms.

Ramsay pointed to the volatile economies of large client countries such as China, India and Brazil. “The situation is fragile. All players are therefore looking for new alliances. Syngenta will not participate in this process passively,” he said.

“I would be surprised if a transaction did not occur in the next six months,” Demaré said. “Our goal is clear. We want to be number one or number two in the industry. We do not want to look back with regret in a few years and realise that we missed chances and have dropped to place three or four.”