Biotech Values

[DewDiligence]

WSJ opines on potential MON-SYT merger (tax inversion):

http://www.wsj.com/articles/syngenta-rejects-unsolicited-monsanto-acquisition-proposal-1431069142

Monsanto Co. ’s $45 billion bid for Swiss rival Syngenta AG highlights the growing global importance of agricultural pesticides… The proposed combination—which Syngenta’s board rejected—would rank as the biggest agribusiness merger ever…

…While neither company addressed it, analysts have speculated that Monsanto could try to move its tax home to Syngenta’s base in Basel, Switzerland if a deal were to occur—a move called an inversion that would intensify regulatory scrutiny. Monsanto has a 29% tax rate, while Syngenta has a 15% rate, according to BMO.

…Despite Monsanto’s continued interest in Syngenta, some analysts questioned the rationale for Monsanto, which has heavily invested in developing its biotech seeds business and de-emphasized crop chemicals in recent years.

“The strategy has clearly been working, so why change?” wrote Wells Fargo & Co. analyst Frank Mitsch in a research note Friday. While Syngenta offers some complementary products, acquiring it “would take Monsanto back into chemicals in a big way... Is that what investors want?”

The short answer, at least for me, is no.