Markets still sceptical over large pesticide, seed mergers

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Markets still sceptical over large pesticide, seed mergers

A meeting with U.S. President-elect Donald Trump on Wednesday wasn't enough to lift stocks in pesticide and seed giant Monsanto this week, with shares currently trading almost 16% below German multinational Bayer's offer price of US$128 per share.

Like Syngenta's proposed takeover from ChemChina, the Bayer-Monsanto deal is subject to antitrust regulations from around the world, so the risk of deals falling through keeps the price below the offer level.

Syngenta shares are currently trading at 10.8% below ChemChina's offer price of CHF470 per share.

Fabienne Cretin, head of merger arbitrage strategies at Paris-based investor OFI Asset Management, told Bloomberg the price showed investors were still too negative about the Syngenta-ChemChina deal's prospects. 

"It’s trading too wide for a deal that’s very likely to close soon," Cretin was quoted as saying.



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