Swiss-based Syngenta, the world’s biggest agrichemicals group, said that its board had unanimously agreed the cash offer by ChemChina – the Beijing-based chemicals giant which a year ago bought Italian tyremaker Pirelli, and last month announced the purchase of German industrial machinery maker KraussMaffei Group. This latest deal would see ChemChina pay a premium of 24% over Syngenta’s Monday close of 378.4 francs.
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China’s state-owned ChemChina tendered a $43 billion bid for Swiss seeds and pesticides group Syngenta today as part of a strategy to improve domestic food production.
Regarding the offer, Syngenta stated that ChemChina has offered $465 per ordinary share plus a special dividend of 5 Swiss francs to be paid conditional upon and prior to closing. The deal also doesn’t carry the same risk as last year’s approach from USA rival Monsanto Co. where regulators could block the deal, he said.
Syngenta’s existing management will remain in place following the deal, which is expected to be completed by the end of the year.
The $42 billion (43 billion Swiss francs) deal is worth roughly 470 Swiss francs per share.
June 2014: Bloomberg reports Monsanto Co. had explored, but was no longer pursuing, a takeover of Syngenta.
The companies use the patented seed varieties – overwhelmingly biotech crops with accompanying pesticides and agrichemicals – to control not only what farmers plant, but how they cultivate their crops, what chemicals they use on their fields and how they can manage their farms. The acquisition also follows a consolidation trend in this space started last December by the Dow-DuPont merger. It will include four existing Syngenta board members. The Swiss company is a big player in the global agrochemical industry.
Similarly, ChemChina said in its press release that it is “fully supportive of Syngenta’s intactness in its operations, management and employees, including keeping its headquarters in Basel, Switzerland”.
“ChemChina has moved very quickly [after Monsanto’s withdrawal], same as the way [Shandong-based] Haier has recently snapped up [US electrical goods giant] GE’s white goods business after Sweden’s Electrolux pulled its bid after it ran into trouble with U.S. antitrust authorities”, Brown told the Post.
The first source said ChemChina did not plan to load Syngenta with too much debt as Chairman Ren Jianxin was committed to make sure Syngenta retained an investment grade rating. John Ramsay, Chief Executive Officer: “Syngenta is the world leader in crop protection having significantly increased its global market share over the last ten years”.
“For many Chinese companies making strategic acquisitions, the primary driver would be whether the asset fits in with the company’s long-term growth strategy, rather than merely focusing on buying the asset at a cheap price”.
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Partner Gordon Dyal’s firm – Dyalco – were lead advisers to Syngenta, along with Goldman Sachs and UBS Group AG.
