Monsanto Still Has Heart Set on Biggest Chemical Deal: Real M&A

 Monsanto Co. is willing to give the biggest acquisition in the chemical industry — and one of the more expensive — another shot.

The $54 billion U.S. seed company has approached Syngenta AG about a takeover almost a year after the two broke off merger talks, according to people familiar with the matter. With Syngenta valued at $31 billion, a deal would be the largest ever struck for a chemical maker, even before accounting for a takeover premium.

The biggest deal targeting a chemical producer to date was the combination of Hoechst and Rhone-Poulenc SA, a more than $20 billion deal that created drugmaker Aventis SA in 1999. The largest transaction among agricultural-chemical makers was the merger between Russian potash producers OAO Uralkali and OAO Silvinit in 2011, valued at less than $10 billion.

Monsanto

 Syngenta trades at about 12.5 times its earnings before interest, taxes, depreciation and amortization in the last 12 months. Large chemical companies purchased in the last decade have commanded a median multiple of about 9 times, so a purchase of Syngenta would also rank as one of the industry’s more expensive deals, according to data compiled by Bloomberg.

Doctors and Environmentalists Are Fighting for a Ban Against Monsanto

 Multinational ag giant Monsanto may seem like an unstoppable force—but don’t tell that to the growing coalition of environmentalists and public health advocates in Argentina. They are fighting toward one audacious goal: to kick the company out of their country.

This week, the movement to oust Monsanto was joined by Fesprosa, one of Argentina’s leading medical unions, which represents more than 30,000 of the country’s doctors and other health professionals. The coalition is calling on the Argentine federal government to ban Monsanto’s products following last month’s bombshell announcement from the World Health Organization that the key chemical component in Monsanto’s widely used herbicide Roundup “probably causes cancer.”

That chemical, commonly known as glyphosate, has become dominant in both Argentina and the U.S. ever since Monsanto launched its line of genetically modified crops designed to withstand heavy application of the herbicide back in the mid-1990s.

At the time, Monsanto’s “Roundup Ready” crops were touted as revolutionary: Because the crops could tolerate glyphosate, the company said, farmers would end up using less weed killer. And in any case, glyphosate was considered a much safer alternative than other chemical herbicides on the market.

Oh, what a difference a couple decades make. As a number of the weeds glyphosate was supposed to kill have developed their own chemical resistance, many farmers have been forced to dump ever-increasing amounts of the herbicide on their fields to combat a growing epidemic of “superweeds.”

As for glyphosate’s supposedly benign impact on human health, the WHO’s recent declaration that the chemical is probably carcinogenic has only added to what critics say is mounting evidence that overuse is wreaking havoc on the lives of those who live and work in agricultural communities.

A 2013 investigation by The Associated Press found cancer rates in Argentina’s Santa Fe province, the center of the country’s soy industry, were two to four times higher than the national average, while rates of birth defects in another growing region were four times higher. As one pediatrician and public health activist put it, “The changes in how agriculture is produced has brought, frankly, a change in the profile of diseases. We’ve gone from a pretty healthy population to one with a high rate of cancer, birth defects, and illnesses seldom seen before.”

For its part, Fesprosa issued a statement saying that glyphosate “not only causes cancer, it is also associated with increased spontaneous abortions, birth defects, skin diseases, and respiratory and neurological disease.”

To say that Argentina serves as a cautionary tale for the dangers of allowing a corporate giant like Monsanto to run amok seems like an understatement. While the introduction of Roundup Ready crops eventually catapulted Argentina to the world’s third-largest producer of soybeans, lax enforcement of spraying regulations has meant that entire communities have been doused in potent herbicides and other ag chemicals.

The growing movement against Monsanto in Argentina has attracted a number of NGOs, reports Telesur, including the environmental group Greenpeace Andino. As Franco Segesso, coordinator of the anti-Monsanto campaign for the organization, said in a statement: “We cannot allow the business interests of a North American multinational to be more important that the health of the people of our region. Governments should promote the technology and practices of organic farming to protects growers, consumers and the environment.”

Meanwhile, in the U.S., the menace of superweeds has spawned a chemical arms race among Big Ag companies as they try to outwit Mother Nature. Monsanto competitor Dow is eagerly rolling out its own line of GMO seed to be used with an even more powerful herbicide, Enlist Duo, a combination of glyphosate and the toxic chemical compound 2,4-D, which has been linked fertility problems, birth defects, and thyroid disorders.

The U.S. Environmental Protection Agency recently expanded its approval of the new chemical cocktail across 15 Midwestern states.

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