By: Alice Baghjian

Syngenta AG has named Chief Financial Officer John Ramsay as provisional CEO to replace Mike Mack, who unexpectedly quit amid mounting shareholder criticism at the world’s largest agrochemical maker for his refusal to engage with Monsanto Co. over its $47 billion takeover approach.

Ramsay will replace Mack on an interim basis, the Basel-based company said in a statement on Wednesday. A U.K. national, Ramsay has spent more than three decades in the chemicals industry, first joining Imperial Chemical Industries in 1984 before overseeing finances at Zeneca Agrochemicals, which later became the foundation of Syngenta following a merger. Syngenta shares gained as much as 5.1 percent.

Mack’s exit comes almost two months after Monsanto withdrew its bid, the third since 2011, citing a lack of cooperation from Syngenta alongside deteriorating agricultural markets. The switch to Ramsay puts a former KPMG accountant in charge at a time when Syngenta is focused on cost cutting and improving margins, in contrast to Mack’s sales background. Bernstein said in an Oct. 7 note that it was cautious about the current management’s ability to move to a cost-cutting mindset from a growth-led one.

Mack’s Successor

“The key question for investors will be who is Mike Mack’s successor going

to be,” said Christian Faitz, an analyst at Kepler Cheuvreux, which kept a ‘hold’ rating on the shares. “It would be best to appoint an industry insider – but an outside person – with a fresh viewpoint on Syngenta.”

Shares of Syngenta, created in 2000 when Novartis and AstraZeneca merged their agrochemical business,  traded 4.7 percent higher at 324.4 francs as of 10:56 a.m. in Zurich. They had fallen 28 percent from its high this year, set in May after Monsanto’s takeover proposal, prior to today’s jump.

After Monsanto withdrew its takeover proposal, Syngenta under Mack announced plans to buy back more than $2 billion of shares and sell its vegetable seeds business to appease shareholders. The company said the buyback was the beginning of a plan to return “significant levels of capital” to shareholders. Mack, 55, said in the statement that Ramsay is sure to "make a major contribution" in his new role.

Shareholder Support

Mack’s resignation after 7 years in charge was welcomed by a shareholder group lobbying for a full strategic review.

“Syngenta urgently needs a leadership that recognizes the realities of the fast changing markets and draws the right conclusions,” a shareholder group calling itself the Alliance of Critical Syngenta shareholders said in a statement today, reiterating another that appeared in a Swiss newspaper over the weekend. The alliance includes private and institutional investors.

Monsanto remains focused on growth opportunities in its core business as well as its share buyback program, the company said in an e-mailed statement Wednesday.

"This action by Syngenta does not fundamentally change anything for us since they rejected our last proposal and we stepped back from our pursuit of the combination back in August," Monsanto said.

Pursuing Syngenta

In pursuing Syngenta, Monsanto was trying to create the largest global producer of seeds and crop chemicals. While Mack was emphatic in his resistance to its U.S. suitor, it was Chairman Michel Demare who took to Youtube to front a video explaining Syngenta’s rationale. Ramsay has been steering the sale of seeds units, which has attracted more than 10 interested parties, he said in a telephone interview earlier this month.

“The new CEO should be an external person who brings a fresh perspective to Syngenta,” said Martin Lehmann, a partner at Zurich-based 3V Asset Management, which holds shares in Syngenta.. “The successor will have to massively improve the company’s communications with its owners, the shareholders.”

Originally Published: Bloomberg