Exclusive: BASF mulls potential bid for Syngenta

Wed Jun 3, 2015 1:11pm EDT
 
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(Reuters) - German chemicals group BASF SE (BASFn.DE: Quote) is considering a potential offer for Syngenta AG SYNN.VX, its Swiss rival which has received a $45 billion takeover offer from Monsanto Co (MON.N: Quote), people familiar with the matter said on Wednesday.

BASF is speaking to investment bankers about the possibility of an offer for Syngenta, though it has made no decision and no bid may materialize, the people said, asking not to be identified because the deliberations are confidential.

Syngenta has so far spurned Monsanto's overtures citing antitrust hurdles, though lawyers representing the two companies met last week in New York to discuss whether the regulatory obstacles can be overcome, a separate source said. A BASF bid for Syngenta would also likely face significant antitrust issues.

BASF, Syngenta and Monsanto declined to comment.

BASF, the world’s largest chemicals group by sales, is also developing improved plant characteristics such as drought tolerability but relies on partners, the biggest being Monsanto, to bring finished seed products to market. Other partners of BASF’s plant biotechnology business, which does not disclose sales, include Bayer AG (BAYGn.DE: Quote) and Cargill Inc [CARG.UL].

BASF’s crop chemicals division with 5.4 billion Euros in 2014 sales, commands about 11 percent of the global crop chemicals market, in third place after Syngenta and Bayer. Any tie-up with the Swiss group would be expected to trigger considerable antitrust related asset sales.

BASF is also a potential buyer of Syngenta's seed business should Monsanto agree to a deal with Syngenta and then sell its seed business to allay antitrust concerns, sources have previously told Reuters.

The German group, which has oil and gas operations and makes products including coatings, catalytic converters and super absorbers for diapers, trades at about 8.4 times core earnings compared with Syngenta’s multiple of 15.9, according to StarMine data.

(Reporting by Greg Roumeliotis in New York and Edward Taylor in Frankfurt; Additional reporting by Freya Berry in London, Ludwig Burger in Frankfurt, Mike Stone in New York and Oliver Hirt in Zurich; Editing by Alden Bentley and Tom Brown)

 
Swiss agrochemicals maker Syngenta's logo is seen in front of the headquarters in Basel  February 4, 2015.             REUTERS/Arnd Wiegmann