The St. Louis-based seed giant announced Wednesday its offer to buy Swiss pesticide producer Syngenta is off the table.
While Monsanto continued to argue the merger would have "created value" for shareholders of both companies, it said in a statement the most recent offer did not meet Syngenta’s financial expectations.
The latest bid, made August 18, was for roughly $47 billion, up from an earlier $45 billion offer. Monsanto also committed to paying a $3 billion break-up fee if regulators did not approve the merger.
Syngenta released a statement Wednesday morning confirming that its board had unanimously rejected the offer. The pesticide producer reiterated its earlier objections, saying Monsanto’s latest offer "significantly undervalued" Syngenta and was "fraught with execution risk."
"Our Board is confident that Syngenta’s long-term prospects remain very attractive with a leading portfolio and a promising pipeline of new products and technologies," said Syngenta’s Chairman Michel Demaré in the statement. "We are committed to accelerate shareholder value creation."
Edward Jones’ senior equity analyst Matt Arnold said Monsanto did the right thing by ending its four-month effort to buy Syngenta. The first offer, made in April, was for $45 billion. In June, Monsanto made the same offer, but added a $2 billion reverse break-up fee.
"This was a deal that they did not necessarily need. It was more of a 'nice to have,' instead of a 'must have,'" Arnold said, "and as a result, we did not want to see Monsanto blindly overpay for this transaction."
Experts had warned that the merger would face tough regulatory scrutiny in the U.S., Brazil and Europe.
Monsanto said in a statement it will continue to focus on opportunities in its core business and resume implementation of its share repurchase program. The company said it remains confident it will deliver its five-year plan to more than double fiscal year 2014 earnings per share by 2019.
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