Citi Sees Gains For Monsanto In Potential Syngenta Deal

Monsanto Company MON could boost profits by 13 percent with its propose acquisition of Syngenta AG SYT, an analyst said Tuesday.

Citi's P.J. Juvekar said a deal would boost Monsanto's annual earnings by $0.90 a share. Analysts on average now expect Monsanto will post profit of $6.69 a share in the year ending in August 2016.

Juvekar apparently made his comments before Sygenta Chairman Michel Demare took to YouTube Tuesday to set down conditions for further merger talks.

Syngenta has twice rejected a $45 billion bid from Monsanto, citing regulatory concerns and valuation.

"This is a very complex transaction which is being proposed," Demare said "It will take a long, long time to be solved."

Juvekar said shares of the two companies may be "range-bound until clarity emerges."

To assuage anti-trust concerns, Monsanto has proposed selling Syngenta's seed business, which Juvekar said may fetch $7.5 billion.

Dow Chemical Co DOW "could be a logical buyer" for the seed business, according to Juvekar.

Monsanto has also proposed selling Syngenta's non-selective herbicide business, which Juvekar said may be worth more than $1 billion.

Cost savings from the merger could result in about $700 million annually in Juvekar's view, or about 2.5 percent of the companies' combined revenue following the proposed divestitures.

Monsanto posted revenue last year of about $15.9 billion; Syngenta's was $15.1 billion.