The shares of Syngenta advanced due to the report that Monsanto reached out and discussed a takeover proposal, according to Bloomberg based on information from people familiar with the matter.
The stock price of Syngenta surged more than 14% to $77 per share during the extended-hours trading, around 4:37 in the afternoon in New York on Thursday.
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Monsanto is one of the world’s largest providers of agricultural products for farmers. Syngenta is also engaged in the agribusiness, and it is focused on the discovery, development, manufacture, and marketing of products that improve crop yields and food quality.
Syngenta has concerns over merger
Bloomberg learned from two sources that Monsanto discussed its interest to acquire Syngenta in recent weeks. The people requested anonymity because the discussion between the companies is private.
According to the people, Syngenta was concerned about a merger, which could face opposition from antitrust regulators. They suggested that Syngenta and Monsanto may not reach a merger agreement. Syngenta has a market capitalization of approximately $31 billion.
Monsanto explored a takeover deal last year
Last year, Monsanto also explored a takeover deal with Syngenta to move its tax location to Switzerland. A deal between the companies did not materialize. Syngenta and Monsanto engaged in preliminary discussions regarding a potential merger.
Syngenta’s management eventually dropped out of the negotiations due to concerns regarding the strategic fit, antitrust issues, and Monsanto’s intention to relocate in Switzerland for tax reasons.
Merger could create the largest player in seeds and crop chemicals
According to market observers, a merger between Syngenta and Monsanto would create the world’s largest players in seeds and crop chemicals. The combined company will also become a strong competitor to Bayer, BASF, and Dow Chemical.
Syngenta is the largest producer of crop chemicals while Monsanto is the largest seed company worldwide. Monsanto dominated the global market for genetically modified crops including corn and soybeans.
The shares of Monsanto increased more than 3% to $18.01 per share after-hours on Thursday.