Syngenta Talks About the Sale

Chris Beytes

It’s been rumored for months, but official word came out in late August that Syngenta, the giant multinational agribusiness firm based in Basel, Switzerland, is selling (divesting, in Wall Street speak) its flower breeding division.

We reached out to Syngenta’s media contact in the U.S., Paul Minehart, and asked him the following questions:

Why sell the flower division?

“Syngenta Flowers is a premium consumer-focused business. Syngenta Flowers is a leader in mass-market plants and has developed innovative solutions for seasoned and hobby gardeners alike. The business has a competitive footprint in both developed and emerging markets, but it has different supply and value chains. As the customer bases are different, there are also relatively few synergies with our crop protection offering. We believe that divestment will allow Flowers to realize its full potential in the global gardening market. The divestment would also enable the new entity to play a leading role in the consolidation of the home gardening market, which is taking place in response to changes in the distribution and retail channels driven by shifts in consumer preferences.”

What assets are included (namely, facilities in what states/countries)?

“The Flowers business is to be sold in its entirety, including employees to transfer with the business to new ownership, with the current management team driving the growth and development of the business. There are approximately 2,500 Flowers employees globally.”

Who (what type of buyer) do you envision buying it?

“A number of firms have expressed interest. Syngenta is open to offers that reflect the premium quality of the seeds genetics, vegetative genetics, solutions and distribution platforms of Syngenta Flowers.”

What’s the likely valuation?

“We do not speculate on the value of the Syngenta Flowers business and this will not be disclosed.”

In early September, they also announced they’re planning on selling their vegetable division, too. This is according to a Reuters report. Vegetables are a $650 million business for Syngenta; the sale could generate up to $3.9 billion, forecasts Syngenta CFO John Ramsey.

Why sell? In the case of flowers, no explanation was given. In the case of veggies, it’s specifically to fund a repurchase of more than $2 billion in shares in order to boost shareholder return, rewarding shareholders after rejecting Monsanto’s recent bids to buy the company.

In the past, we in horticulture were only exposed to Syngenta’s flowers. But several years back, with the rise in interest in veggie gardening, the flower division decided to begin selecting veggies from the company’s line to promote alongside their flowers. GT