ZURICH-Syngenta AG shares surged Friday on speculation the Swiss pesticides maker could be the subject of a almost $42 billion offer from China National Chemical Corp – a deal that would represent one of the largest takeovers by a Chinese company for a European target. Its chief executive stepped down two months later.
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Shares in Syngenta surged 7.8% in early trading Friday in Switzerland, to 372.6 Swiss francs.
Syngenta is now under pressure to increase returns for shareholders, and there are reportedly additional merger suitors in the running, besides ChemChina.
Asked about the report, a ChemChina spokeswoman said the company had nothing to announce.
ChemChina and Syngenta are still in talks over a potential deal.
The company has a history of acquiring interests in Western specialty chemicals businesses.
“Future demand for pesticides globally will stay strong, particularly for a country like China, which is trying to boost grains production”, said Duan Yousheng, an analyst with China Pesticides Industry Association.
Formed in 2000 through the merger of Novartis Agribusiness and Zeneca Agrochemicals, Syngenta is the world’s largest crop chemical producer, and the third-largest in seeds and biotechnology by sales. “Only state-owned firm is able to make such offer”, he added. Syngenta rejected Monsanto’s cash plus stock offer in August.
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The Swiss company turned down the approach saying it undervalued the company and would face opposition from regulators.
