U.S.-based Monsanto Co. has raised its offer to buy Switzerland's Syngenta AG, putting the latter's value at $47 billion, in a bid to create one of the biggest agricultural companies in the world.
Reuters cited an anonymous sources that said Monsanta has increased its is offer to 470 Swiss francs ($501.98) per share from CHF 449 per share. The move was meant to convince Syngenta to soften its opposition to the takeover, which it rejected in April.
Bloomberg, which broke the news on Monday, said Monsanto is now proposing a higher cash component in its current bid, broken down as 45 percent cash with the rest in shares. It added that Syngenta's board will meet on Tuesday to discuss the offer, also citing an anonymous source.
The news wire said several of Syngenta's top shareholders are lobbying to at least hear out Monsanta. The report also said majority of Syngenta's former and current shareholders are supportive of a deal at a price of 473 Swiss francs a share, citing a survey from A Sanford C. Bernstein earlier this month.
As an added sweetener, Monsanto is willing to pay $3 billion from $2 billion to Syngenta if the deal is not consummated due to regulatory hurdles. Still citing an anonymous source, Reuters said Monsanto is open to further negotiations on its offer. Officials from both companies did not comment on the report, the newswire said.
The offer has lifted Syngenta's shares by 10 percent in U.S. and Zurich, putting the company's market value at $35.5 billion.
Bloomberg said if the acquisition pushes through Monsanto will become the largest global producer of both seeds and crop chemicals, widening its footprint in Europe significantly. Reuters noted that Monsanto's planned acquisition of Syngenta comes amid a challenging business environment as crop prices weaken and grain exports are weighed down by a strong dollar.
The St. Louis-based firm remains determined to complete the acquisition despite being repeatedly turned down by Syngenta, seeing potential efficiency improvements and cost savings from merged operations. Syngenta has, however, balked at the offers citing possible opposition from competition authorities and that it can do fine on its own.
Monsanto said it is willing to make divestments to satisfy competition authorities concerned about the company becoming a dominant player in a number of markets.
