Vilmorin plays down interest in Syngenta vegetable seeds unit

Vilmorin & Cie SA

06/10/2015 14:33

By Sybille de La Hamaide 
    PARIS, Oct 6 (Reuters) - France's Vilmorin  VILM.PA  
confirmed on Tuesday it would look at Syngenta's  SYNN.VX  
vegetable seeds business if the Swiss company were to sell but 
stressed that the benefits were not obvious and the price might 
be too high. 
    Vilmorin, the world's second-largest vegetable seeds 
producer, is facing pressure to say whether it will bid for 
Syngenta's equivalent business. 
    The Swiss group, whose main business is making pesticides, 
needs to offer tangible rewards to shareholders after it turned 
its back on a $47 billion bid from Monsanto  MON.N . 
 ID:nL5N1190BL  
    Vilmorin had said in July it would consider Syngenta's seed 
assets after Monsanto said it would divest them to win 
regulatory approval for its proposed takeover.  ID:nL5N1095VE  
    "Vilmorin's history has shown that we can be bold when it's 
worth it but that we don't do just anything," Vilmorin CEO 
Emmanuel Rougier told reporters. 
    "We are speaking about investment levels that are so high 
that potential obstacles need to be lifted before we dare go for 
it." 
    These obstacles include a lack of clarity on assets Syngenta 
would put up for sale, a difference in structure between the two 
companies that would complicate integration and a risk of 
dominant positions on several markets, he said. 
    Analysts have put the value of Syngenta's vegetable seeds 
business at between $1.6 and $2.5 billion. That would make it a 
big deal for Vilmorin which has a market capitalisation of only 
1.4 billion euros ($1.6 billion).   
    Chief Financial Officer Daniel Jacquemond did not rule out a 
capital increase were it needed.  
    However, Rougier noted that both companies had their main 
markets in Europe and North America, reducing the benefits of a 
merger. 
    "If we look tomorrow where we could expand, it's in Asia and 
Africa and it's not Syngenta which will bring us this because 
they are not better there than we are," Rougier said.  
    Vilmorin expects operating margin to remain stable next year 
after posting poor performances for 2014/15 on Monday due to 
sharp losses in its grain business, hit by lower maize sowings 
and difficult economic conditions in Ukraine and Russia. 
 ID:nFWN12402C   ID:nHUG5XvGw6  
    The company sees a 5 percent rise in its vegetable 
activities in the next fiscal year from 615 million euros,    
while grains would "maybe" remain stable at 595 million euros 
although the company pointed to still uncertain markets in the 
Black Sea region.  ID:nL8N0XO47T  
    Vilmorin shares were down 2.7 percent to 65.33 euros by 1310 
GMT. 
($1 = 0.8906 euros) 
 
 (Reporting by Sybille de La Hamaide; Editing by Keith Weir) 
 ((Sybille.deLaHamaide@thomsonreuters.com; +331 4949 5145; 
Reuters Messaging: 
sybille.delahamaide.thomsonreuters.com@reuters.net)) 
 
Keywords: SYNGENTA M&A/VILMORIN