Monsanto, the U.S. seed and agrochemicals group known for its genetically modified crops, wants to switch its headquarters from the U.S. to the UK as part of a complex merger deal designed to unlock tax savings for shareholders.
The group, which was founded in St. Louis, Missouri in 1901, is circling Swiss rival Syngenta with a so-called “corporate inversion” proposal that would involve setting up a new UK company.
Such inversions have been closely associated with aggressive tax planning, although sources close to Monsanto claimed tax was not the company’s main motivation.
Syngenta rejected the proposal — which it values at $45bn (£30bn) — claiming Monsanto was offering “the same inadequate price” as it had done in an approach in April.
Under the terms of Monsanto’s plan, investors in the Swiss company would end up with a holding of about 30 percent in the new company, with the U.S. firm’s shareholders taking the rest. Syngenta shareholders would also receive some cash.
Monsanto has been talking about a deal with Syngenta since April, but correspondence released by the Swiss company recently set out details of the US firm’s proposal for a new company, registered in the UK.
“A new parent company, domiciled in the UK, would demonstrate that our merger will create a new global enterprise … [and] provide additional synergies,” wrote Monsanto chief executive, Hugh Grant. “We would also propose a new name for the combined company to reflect its unique global nature.”
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