November 17, 2015 / 6:14 PM / in 2 years

Syngenta among options for Monsanto takeover bids: executives

Flowers grow in front of Swiss agrochemicals maker Syngenta's logo at the company's headquarters in Basel August 19, 2015.Arnd Wiegmann

ST. LOUIS (Reuters) - Monsanto Co. (MON.N) executives are discussing whether the world's largest seed company should acquire agrochemical rivals, including top pesticide maker Syngenta AG SYNN.VX, Monsanto President Brett Begemann said on Tuesday.

"Everybody's talking now. There's multiple ways things can occur," Begemann said.

Monsanto abandoned a $45 billion bid for Syngenta in August.

Begemann said executives and staff routinely talk with counterparts at Syngenta, Bayer AG (BAYGn.DE) and other agrochemical companies regarding existing business dealings.

But in recent months, Monsanto executives have been weighing whether new partnerships and licensing deals, or acquisition bids, might be possible with other companies in the sector, Begemann told Reuters.

In particular, he said, Monsanto is keeping a close eye on what farm chemical product lines it could acquire if rivals merged their agricultural businesses, such as Dow Chemical (DOW.N) and Dupont, and were forced to spin-off assets in order to meet regulatory approvals.

The Wall Street Journal has reported that Syngenta has been talking to Dupont Co. (DD.N) about merging with its agricultural unit, while Dupont has separately been in talks with Dow Chemical Co. (DOW.N) about its seed and farm chemical division.

Monsanto executives are focusing on chemistry, not seed, assets for such potential acquisitions, Begemann said.

A representative of Syngenta could not immediately be reached for comment. Representatives of Dupont, Dow and Bayer also could not immediately be reached for comments.

In separate remarks at an investor meeting in St. Louis, Monsanto Chief Executive Hugh Grant said the company is "best placed to be a leading consolidator or a leading partner in an industry that is changing."

Any deals would need to be a "strategic fit" for Monsanto and provide incremental growth, Grant said. Monsanto does not need to buy or partner with an agrochemical rival in order to meet its financial forecasts or growth plans, he said.

The company said it expects outlays of $1.1 billion to $1.4 billion on capital expenditures by its fiscal 2019, up from $967 million of capital expenditures in its fiscal 2015.

Monsanto's internal discussions, which have been going on since the company walked away from its latest bid to acquire Syngenta in August, include weighing the benefits of bidding for rivals, Begemann said at the company's headquarters.

"We've had conversations inside" about Syngenta and other agricultural companies, Begemann said. Company executives were studying every possibility for consolidation in both the seed and agrichemical sectors.

"I'm not going to comment on whether we've pursued any other conversations" outside of Monsanto, Begemann said.

For months, nearly all of the major players in the farm chemicals and seeds business have been the subject of consolidation talk, amid a landscape of plummeting grain prices and farm income.

Syngenta has rejected a $42 billion takeover offer by state-owned China National Chemical Corp, Bloomberg reported. Earlier this year, BASF SE (BASFn.DE) put together loan guarantees for a prospective bid for Syngenta, but never used the credit facility.

For now, Monsanto is "sitting back and staying focused on our core business," Begemann said Tuesday. "If an opportunity comes along, we'll look at that." Monsanto has "no new news" regarding what it might do in terms of a possible offer to Syngenta or any other agrochemical company, Begemann said.

Asked by a reporter if Monsanto had been in talks with Bayer AG (BAYGn.DE), Begemann declined to comment.

Referring to the entire industry, Begemann said, "There are a lot of discussions going on, and only a handful that will come to fruition in the future."

Begemann said the company expects its profit growth will reach 20 percent a year, and doesn't need a big acquisition deal to achieve its previously reported goal of doubling earnings to more than $10 a share by 2019.

Reporting by PJ Huffstutter in St. Louis; Writing by Karl Plume in Chicago; Editing by Paul Simao and Grant McCool

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