Syngenta shareholders approve ChemChina's $43-bn takeover offer
05 May 2017
Shareholders of Swiss pesticides and seeds group Syngenta AG have approved the company's takeover by China National Chemical Corp (ChemChina), paving the way for the $43 billion acquisition to finally close.
ChemChina today said it has received 80.7 per cent of shares in favour of the deal, which is higher than the minimum acceptance of 67 per cent needed for the transaction to go through.
"At the end of the main offer period on May 4, based on preliminary numbers, around 80.7 percent of shares have been tendered. Subject to confirmation in the definitive notice of interim results scheduled for May 10, the minimum acceptance rate condition of 67 percent of issued Syngenta shares has been met," both companies said in a joint statement.
In February last year, state-owned ChemChina struck a friendly $43-billion deal to acquire Syngenta, which would make it the world's biggest supplier of pesticides and agrochemicals. (See: ChemChina to acquire Syngenta in $43-bn friendly deal)
The agreed deal came eight months after Syngenta spurned a $45-billion unsolicited takeover offer from its US rival Monsanto Co on the ground that the offer undervalued the company and posed execution risks. (See: Syngenta rejects $45 billion Monsanto takeover offer)
The ChemChina-Syngenta deal is the second-biggest in the chemicals industry since the past year, after the proposed $130-billion Dow Chemical-Dupont merger, which is yet to close.
The ChemChina-Syngenta merger has been approved by regulators from all countries where both operate, including from the EU and the US.
Syngenta, which has annual revenues of $15.3 billion, was formed through the merger of Novartis Agribusiness and Zeneca Agrochemicals in 2000, and has since grown through 13 acquisitions.
It is the world's largest crop chemical producer, and the third-largest in seeds and biotechnology by sales.
The company deals in herbicides, insecticides and fungicides for crop protection, field crops, vegetables and flower seeds, seed-care products and turf, garden, home care and public health products.
Listed on the Swiss and New York stock exchanges, Syngenta employs over 28,000 people in over 90 countries and has 12 production facilities across Switzerland, the US, the UK, Brazil, India, France and China.
Its main competitors are Monsanto Company, BASF, Dow AgroSciences, Bayer CropScience and DuPont Pioneer.
For ChemChina, the Syngenta transaction would be the biggest overseas acquisition after it purchased Italian tyremaker Pirelli in August 2015 in a $7.7-billion deal.
ChemChina was created in 2005 by putting together several chemical firms under China's erstwhile ministry of chemical industry and grew into a $36.5-billion business with 140,000 employees under chief executive Aye Ren Jianxin, a former communist youth league leader.
The company's main businesses include materials science, life science, high-end manufacturing and basic chemicals, among others.
ChemChina's recent overseas acquisitions include German machinery maker KraussMaffei Groupa, and a 12-per cent of Swiss commodity trader Mercuria Energy Group.
Its earlier purchases include Adisseo Group of France, Australia's Qenos Holdings and Norway's Elkem.
The company has invested over $15 billion in overseas deals in the past decade prior to Syngenta.
However, it is still overshadowed by state-owned behemoths Sinopec Corp and PetroChina Co Ltd
ChemChina had secured $30 billion and $20 billion loans from China's Citic Securities and HSBC respectively to fund the cash deal.
Once the deal is completed, ChemChina will delist Syngenta's shares in Switzerland and the US as soon as permitted by law and applicable regulations.
ChemChina said the first payment settlement is scheduled for 18 May, at which time it will take over control of the company.