ChemChina Is Close To A Deal For Syngenta

- Feb 26, 2016 -

The China National Chemical Corporation, a Chinese state-owned company, is closing in on a deal to acquire Syngenta, which would be the largest acquisition of a foreign company by a Chinese company, according to people with knowledge of the discussions.

A deal would most likely value Syngenta, the Swiss agricultural and chemical giant, at about $43 billion, according to one of the people with knowledge of the discussions.

A deal could be announced as soon as Wednesday, but it was not yet final and might not happen, according to these people, who spoke on condition of anonymity. Syngenta is set to report its fourth-quarter results on Wednesday.

The Chinese company, known as ChemChina, has offered to pay about 470 Swiss francs, or about $460, per share of Syngenta, one of the people said. That would value Syngenta at about $43 billion.

Syngenta declined to comment on Tuesday, and ChemChina did not immediately respond to a request for comment.

Shares of Syngenta surged 4 percent in Zurich trading on Tuesday after reports of a potential deal.

Syngenta, based in Basel, Switzerland, is one of the world’s largest manufacturers of agricultural chemicals, producing insecticides, fungicides, herbicides and seeds. The company reported sales of $15.1 billion in 2014 and employs more than 28,000 people in over 90 countries.

It was created in November 2000 by the merger of the agribusinesses of Novartis and AstraZeneca.The potential deal between Syngenta and ChemChina comes about six months after the agricultural giant Monsanto abandoned a takeover bid of nearly $47 billion for Syngenta.Syngenta rejected multiple approaches by Monsanto last year over regulatory concerns.

Chinese companies have been on a spending spree overseas, landing 136 deals worth $31.3 billion in 2015 alone.ChemChina, under its chairman, Ren Jianxin, has been no exception, taking stakes in chemical, machinery and transportation companies.

It bought Pirelli, the Italian tire maker, for 7.1 billion euros, or about $7.8 billion, in 2015 and just last month sealed a deal for KraussMaffei, a German manufacturer of plastics and rubber processing machinery, for about $1 billion. ChemChina now owns companies in countries including France, Britain and Israel.

In its latest deal, it took a minority stake in Mercuria, a Swiss energy and commodities company, in a move to diversify its portfolio and expand into the energy sector.

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