BASEL, SWITZERLAND — In a letter to shareholders on June 8, Syngenta leaders said they are rejecting a second offer from Monsanto, which Syngenta said essentially repeated the first proposal on April 18.

The only change by Monsanto was to add a reverse regulatory break fee, which Syngenta said was wholly inadequate. 

Monsanto's second letter represents the same inadequate price, same inadequate regulatory undertakings to close, same regulatory risks and same issues associated with dual headquarters' moves, said Syngenta’s Michel Demaré, chairman and Mike Mack, chief executive officer, in the letter to shareholders.

Monsanto’s proposal would provide Syngenta shareholders with a premium of more than 43% over the 314 CHF unaffected share price on April 30, and a more than 45% premium to Syngenta's 52-week volume weighted average share price. Monsanto has proposed to Syngenta a new $2 billion reverse break-up fee payable by Monsanto if it is unable to obtain necessary global regulatory approvals.

Syngenta said that if a transaction were to be announced and not consummated, there would be significant harm and value destruction for Syngenta and its shareholders, which requires a careful assessment of all risks and a clear path to closing, and is in no way adequately addressed by a reverse regulatory break fee relative to such fees seen in transactions with comparable levels of regulatory risk.

Further, Syngenta's board, in conjunction with its legal advisors, does not think the regulatory issues are resolved as simply as by a pre-agreed and pre-announced package of horizontal divestitures, which is Monsanto's proposed approach. There are notable examples of proposed transactions that have been blocked by regulators due to "conglomerate concerns" and other non-horizontal issues and the board said it has concern that a combination between Monsanto and Syngenta may be viewed as such.

In order to evaluate this issue as fully as possible, the respective outside counsel of Syngenta and Monsanto met on three separate occasions, subsequent to the first rejection letter, to discuss in good faith the regulatory challenges. These meetings have reinforced Syngenta's assessment of the regulatory risks and Monsanto has made no attempt to seriously address these concerns, Syngenta said.