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 It is still working on the deal and could decide to increase its
initial bid which valued the firm at 449 Swiss francs a share, a 36
percent premium to Thursday's closing price.
A deal would give Monsanto, which dominates the market for seeds and
genetically-modified crops, access to lucrative crop protection
chemicals and create an industry behemoth with combined sales of
more than $31 billion.
Syngenta rebuffed the cash-and-shares offer, saying it undervalued
its prospects and did not fully take into account regulatory risks.
But the Swiss firm does not consider the deal dead, according to
another source, who is familiar with Syngenta.
Monsanto, which earlier confirmed it had made an offer, declined to
comment on whether it would improve the bid.
A spokesman for Syngenta declined to comment.
 Meanwhile, major investors in Syngenta told Reuters that they were
confident a deal with Monsanto would come off if the U.S. firm upped
its initial $45 billion bid by at least 10 percent.
"Monsanto is likely to come back relatively soon, and not with a
modest price," said a third source, a banker who has worked with the
U.S. company in the past.
Monsanto may need to pay a premium of up to 40 percent to Syngenta's
shareholders to make the deal attractive, the banker said.
To ease antitrust concerns, it may also team up with an industry
partner to acquire Syngenta's U.S. seeds business, as the two groups
are already seen as market leaders in the American seeds industry,
according to the first source close to Monsanto.
ANTITRUST SCRUTINY
Monsanto foresees strong benefits from a takeover of Syngenta, which
makes heavy research and development (R&D) investments in crop
technology to increase the average productivity of crops such as
corn, soybeans, sugar cane and cereals.
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The U.S. firm, meanwhile, is focused on conventional and biotech
seeds and last year raised its R&D spending to $1.7 billion from
$1.5 billion in 2013.
"There is a clear strategic logic to a deal," an industry source
said. "Syngenta is the only available target in crop protection.
It's no wonder Monsanto continues to circle the company."
Other large providers of crop chemicals such as BASF <BASFn.DE>,
Bayer <BAYGn.DE> and Dupont Pioneer are not seen as sellers and have
diversified their operations in areas which are less relevant for
Monsanto, the banker said.
However, Monsanto could seek to strike an alliance with the likes of
Bayer and BASF and place a joint bid in an effort to ease "draconian
antitrust scrutiny," the banker added.
"The production of seeds is a concentrated industry," said Andre
Barlow, an antitrust expert at Doyle, Barlow and Mazard PLLC.
"Both (companies) overlap in crop protection and seeds and there is
a lot of R&D in this space, which would raise additional concerns,"
he said.
(Reporting by Pamela Barbaglia in London and Alexander Huebner in
Frankfurt; Additional reporting by Arno Schuetze, Diana Bartz, Greg
Roumeliotis, Mike Stone, Sybille de La Hamaide, Avik Das; Editing by
Keith Weir and Pravin Char)
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