If completed, the Syngenta deal will be the biggest foreign acquisition by a Chinese company.
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Syngenta shareholders will get paid as much as 16 Swiss francs per share by ChemChina, and this is apart from a special dividend of 5 francs on closing.
Last year, it bought the Italian tire maker Pirelli for roughly $8 billion.
Well capitalised Chinese companies, both private and state-backed, have been on a shopping spree for assets in the chemical, agricultural and biotechnology space, according to China-Ag Market’s director Loren Puette.
“For Syngenta, the deal holds the prospect of new capital and greater access to the huge China market, while for ChemChina, it gives the company access to Syngenta’s advanced biotechnology for developing seeds”, the Wall Street Journal said.
Also in January, the Chinese company said it planned to buy Germany’s KraussMaffei Group, which makes machinery for producing plastics and rubber, for 925 million euros ($1.01 billion).
“One of the most important elements of this offer is that Syngenta remains Syngenta”, Pisk said.
Moreover, it’s the second major takeover in the global agricultural industry in recent months after United States companies Dow Chemical and DuPont agreed to a $130-billion merger.
Ramsay said the deal was “very appropriate and attractive” to Syngenta shareholders, but its board would have to consider any rival offers.
Last month, Monsanto’s CEO said attempts to re-engage Syngenta about a potential takeover had been hard but that he believed there was still “a significant opportunity” for integration between the companies.
ChemChina has secured financing commitments sufficient to acquire 100 percent of pesticides group Syngenta, and is looking to initially purchase 67 percent of the agrichemicals company to meet a Swiss takeover threshold, a source with direct knowledge of the deal said. Syngenta had previously been in on-off talks with Monsanto Co. about a possible deal, revealed Syngenta Chairman Michel Demare said in December. After the transaction is finalised, a board of directors composed of six members will be chaired by Ren Jianxin, president of ChemChina, and will include four members of the current board.
A Chinese national flag and a company flag fly in front the logo of China National Chemical Corporation at the company’s headquarters in Beijing, Mar 24, 2015. “Syngenta will remain Syngenta and will continue to be headquartered in Switzerland, reflecting this country’s attractiveness as a corporate location”, said Michel Demaré, chairman of Syngenta in a prepared statement.
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ChemChina further expects to help Syngenta to implement its strategy, as well as enter into new market segments in China and other nations for supporting Syngenta’s future growth. “This deal will enable us to maintain and expand this position, while at the same time significantly increasing the potential for our seeds business”.
