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Syngenta to sell vegetable seeds operations


Zurich | Reuters — Swiss agrichemicals group Syngenta plans to sell its vegetable seeds business and buy back more than US$2 billion worth of stock in a campaign to boost shareholder returns after it rejected a takeover approach from Monsanto.

“The board and management are determined to accelerate shareholder value creation and our actions today underpin our commitment to do so. Our commitment is also shown by the significant capital return program that we announced today,” chairman Michel Demare said in a statement Thursday.

The company expressed confidence in its 2018 margin target of 24-26 per cent and reiterated the full-year guidance for 2015 it gave in July.

It said its “initial program” of share repurchases would commence in the weeks ahead. “This will be in addition to the progressive dividend policy which the company has followed for several years,” it added.

Syngenta management had faced pressure to offer tangible rewards to shareholders after the pesticides company turned its back on a deal with unwanted U.S. suitor Monsanto worth around US$47 billion.

With no alternative bidder seen on the horizon, analysts had speculated that the company could buy back shares as a short-term measure to help win back investor confidence.

“By demonstrating and unlocking the inherent worth of our leading global seeds portfolio we can create significant additional value,” CEO Mike Mack said on Thursday.

“I look forward to updating shareholders in the coming months on progress, including providing further visibility on the underlying profitability of our portfolio of assets.”

Demare had promised a thorough review of its product lineup after spurning the Monsanto approach.

Reporting for Reuters by Michael Shields in Zurich.

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