Monsanto President Brett Begemann on Thursday told U.S. soybean growers that if it buys Syngenta, the combined company would be run out of the United States and enough Syngenta operations would be shed to ensure continued market competition for seeds and chemicals.
"There will be good competition. Whatever choice was available before the transaction, if there is one, will be available after the transaction," Begemann said in a presentation to the United Soybean Board (USB) in Des Moines, Iowa.
Begemann's appearance at the United Soybean Board meeting in Des Moines, Iowa, is one of a series of presentations he and Monsanto Chairman Hugh Grant are making to shareholders and farmer groups in Europe and the United States to solicit support for the company's $45 billion offer for Swiss-based Syngenta AG. Grant has even offered to change the Monsanto name from the merged entity as he woos Syngenta shareholders.
Monsanto is the world's largest seed company and the maker of Roundup herbicide. Syngenta is also a large seed company and a global leader in the agrichemical/crop protection market.
Syngenta has thus far rejected Monsanto's overture, saying it is undervalued, and would be difficult to win regulatory approval due to antitrust hurdles.
Some farmer groups have expressed concerns about a tie-up, fearing that putting the seeds they buy as well as a wide range of herbicides, insecticides, and fungicides and other inputs in the hands of one provider could limit choices and raise prices.
"As a producer you have to have options," said David Hartke, a USB director who grows corn and soybeans on a 1,400-acre farm in Illinois. Hartke called it "nerve-wracking" to consider how a Syngenta/Monsanto merger might impact the market.
Begemann reiterated the company's plan to sell off all of Syngenta's seed operations, and to sell off some agrichemical assets as well, likely Syngenta's Touchdown herbicide.
"We'll likely keep Roundup and sell Touchdown," said Begemann.
He said Syngenta's seed treatment business was one example of an area where Monsanto currently falls short.
"Our crop protection is limited to basically Roundup and a few other corn grass herbicide products," said Begemann. "We've done some work in soybeans and corn where we have our own seed treatment portfolios but most of those molecules are coming from other companies, including our competitors in the marketplace."
Begemann said that while a merged entity might be domiciled in Europe to make the deal more appealing to European shareholders worried about tax implications, operations would be run out of Monsanto's current home base of St. Louis, Missouri.
"It's not going to be run from Europe, it's going to be run from here. Where we're domiciled doesn't mean anything," Begemann said.
So far, Monsanto's efforts to win shareholder support have met with mixed results, according to a source close to Syngenta.
"We don't feel pressure from shareholders to accept Monsanto's proposal," the source told Reuters.
Source: www.agprofessional.com