ChemChina Offers Syngenta $43B for Acquisition
SWITZERLAND & CHINA - ChemChina has put its money where its mouth is against rivaling Monsanto in the bid to take over Switzerland-based Syngenta, having put a $43 billion bid on the table.
"In making this offer, ChemChina is recognizing the quality and potential of Syngenta’s business," Syngenta Chairman Michel Demaré said in a press release. It is a known fact that one of Syngenta’s largest drawbacks to accepting Monsanto’s numerous offers was that it felt the proposed amounts did not equate to its value. "This includes industry-leading R&D and manufacturing and the quality of our people worldwide. The transaction minimizes operational disruption; it is focused on growth globally, specifically in China and other emerging markets, and enables long-term investment in innovation.”
If accepted, Reuters reports that this would be the largest foreign purchase ever made by a Chinese firm as the country looks to secure better solutions for food.
As we have previously reported, Monsanto made a number of bids for the company last year, causing a stir in the market at the idea of the two powers joining. It actually bid $4 billion more than what ChemChina has proposed just days before abandoning pursuit of the acquisition all together.
Now, despite still needing shareholder approval, it looks as though Syngenta is lining up to accept ChemChina’s offer.
"Syngenta will remain Syngenta and will continue to be headquartered in Switzerland, reflecting this country’s attractiveness as a corporate location," Demaré added, and CEO John Ramsay appears to agree.
"This deal will enable us to maintain and expand this position, while at the same time significantly increasing the potential for our seeds business," Ramsay said. "It will ensure continuing choice for growers and ongoing R&D investment across technology platforms and across crops. Our commitment to cost and capital efficiency will remain unchanged."
Between the two suitors, many could see this as a lesser of two situation, in which both mergers could rock the boat on the ag market. Ramsay told Reuters, however, that regulatory oppositions seemed either minimal or unlikely.
"I think the overall regulatory approvals will not be very challenging," Ramsay said, according to the report, adding that he expected antitrust regulators to acknowledge the limited overlap.
If acquired, Syngenta shareholders would receive the proposed ordinary dividend of CHF11 (US$10.93) in May of this year, a total of CHF480 (US$465) per ordinary share.
According to the release, a Swiss and U.S. tender offer will commence in the coming weeks with expectations that the transaction would be concluded by the end of the year.
While it is not over yet, the Syngenta board did unanimously recommended shareholders accept ChemChina’s offer, emphasizing that its existing management would continue to run the company as per the proposed deal.
AndNowUKnow will continue to report on this story as it develops further.