ChemChina bids for takeover of Swiss Syngenta (now illustrated)
Government-owned China National Chemical Corp. capped a string of acquisitions with a USD 43 billion cash offer to buy a majority holding (around 77 %) of Swiss pesticide and seed company Syngenta AG, in the most ambitious foreign takeover attempt by a Chinese company to date. The Board of Directors of Syngenta is backing the proposal to its shareholders. It will be a cash transaction and not by switching debts
Syngenta said on February 3, 2016 that the agreed offer by the Chinese company, commonly known as ChemChina, amounted to USD 465 a share, plus a special dividend of five Swiss francs (USD 4.91) a share to be paid immediately before the deal’s closing.
Syngenta shares jumped, rising 6 % on the Zurich bourse by early afternoon on the news of the offer, worth 480 francs a share.
“We have a very attractive offer on the table and we are putting it to our shareholders,” Syngenta’s interim Chief Executive John Ramsay said in an interview.
The proposed deal, which requires approval from Syngenta shareholders, sends a signal that despite sharp drops in global equity markets driven by concerns over economic growth, particularly in China, companies still see opportunities for expansion through acquisitions.
Syngenta expects that there will be no changes on the management and employment in Switzerland.
The takeover would help ChemChina grow Syngenta’s business in China and other emerging markets, and help to gain a foothold in the U.S. Acquiring Syngenta’s intellectual property is also attractive as the Swiss company develops genetically engineered seeds that may help further open the tightly-regulated Chinese market for biotech crops.
It is noteworthy that Syngenta defended itself in 2015 against a bid of a takeover by U.S. Monsanto.