WSJ : ChemChina Nears Deal to Buy Controlling Stake in Syngenta

ChemChina Nears Deal to Buy Controlling Stake in Syngenta

Deal could represent the largest foreign acquisition by a Chinese company

China National Chemical Corp. is nearing a deal to buy a controlling stake in Syngenta AG that values the Swiss pesticide company at about $43 billion, according to people familiar with the matter.

The deal could be announced as soon as Wednesday, although it could still fall apart, the people said.

If consummated, the transaction would represent the largest foreign acquisition by a Chinese company. Terms of the deal call for a price of about 470 Swiss francs ($460.9) a share.

Shares in Syngenta rose sharply after The Wall Street Journal first reported the news.

The deal would mark the latest consolidation of the chemicals sector after DuPont Co. and Dow Chemical Co. announced their merger in December. The trend is shrinking the number of companies that dominate the global seed and pesticide business.

U.S. chemical company Monsanto Co. kicked off the current deal making wave last spring when it proposed to buy Syngenta. After unsuccessfully courting Syngenta investors and sweetening its offer to $46 billion in cash and stock, Monsanto dropped its pursuit in August. That left many of Syngenta’s shareholders frustrated because of a steep decline in the Swiss firm’s share price and amid a grim outlook for the sector.

Since then, Syngenta has said that it is discussing possible deals with multiple parties, a shift in its initial resistance to a takeover.

China National Chemical, known as ChemChina, has been on a spending spree in recent years, including a $1 billion deal last month to buy German equipment maker KraussMaffei Group.

For Syngenta, a deal with ChemChina, a smaller player in agricultural products, would likely face lower regulatory risks than a combination with its main Western rivals, which also include Bayer AG and BASF SE.
Many shareholders would welcome a deal with ChemChina, partly because it is expected to make an all-cash offer as opposed to Monsanto’s mix of cash and shares.

“ChemChina would be the perfect solution for shareholders, especially if it was all cash. It would have much less regulatory issues than a link with Monsanto, and there would likely to be less jobs lost in Switzerland,” said Martin Lehmann, a fund manager at 3V Asset Management, which holds a stake in Syngenta.

FT : ChemChina nears $43bn Syngenta deal

ChemChina is nearing a deal to buy agribusiness group Syngenta for around $43bn in what would be China’s biggest-ever outbound acquisition, according to people close to the deal.

The companies are on the cusp of announcing a deal in which ChemChina would pay around SFr470 per share for the Swiss pesticide and seed maker, report Arash Massoudi, James Fontanella-Khan and Don Weinland.

The exact structure of a deal remains unclear, but a deal could be revealed as soon as Wednesday when Syngenta reports its result, these people said.

Friday is the last working day before much of East Asia is swept up in lunar New Year’s celebrations that will close mainland markets for a week. While the companies are pushing to finish before then, a person familiar with the deal said the size and complexity of the transaction could stand in the way of completion.

China National Chemical Corp, the company’s full name, has made several high-profile cross-border buyouts over the past decade. Led by its chairman Ren Jianxin, ChemChina bought Italian tyre maker Pirelli for $7.9bn last year, giving the Chinese state-owned firm a significant presence in the global tyre industry, in which it had little experience prior to the deal.

In January, ChemChina agreed to pay $1bn for Krauss Maffee, the German machinery company, and also bought a 12 per cent stake in Mercuria, valuing the Swiss energy trader at more than $3bn.

The Syngenta buyout would make ChemChina a dominant player in the $100bn-a-year agribusiness industry. Syngenta did not immediately respond to a request for comment.

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UPS beats by $0.15, misses on revs; guides FY16 EPS in-line
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WSJ : ChemChina Nears Deal to Buy Controlling Stake in Syngenta

ChemChina Nears Deal to Buy Controlling Stake in Syngenta
Deal could represent the largest foreign acquisition by a Chinese company

China National Chemical Corp. is nearing a deal to buy a controlling stake in Syngenta AG, according to people familiar with the matter.
The deal could be announced as soon as Wednesday, although it could still fall apart, the people said.
If consummated, the transaction would represent the largest foreign acquisition by a Chinese company. The deal’s terms are unclear, but Syngenta’s current market value is about $34 billion.
The deal would mark the latest consolidation of the chemicals sector after DuPont Co. and Dow Chemical Co. announced their merger. The trend is shrinking the number of companies that dominate the global seed and pesticide business.
U.S. chemical company Monsanto Co. kicked off the current deal making wave last spring when it proposed to buy Syngenta. After unsuccessfully courting Syngenta investors and sweetening its offer to $46 billion in cash and stock, Monsanto dropped its pursuit in August.
Since then, Syngenta has said that it is discussing possible deals with multiple parties, a shift in its initial resistance to a takeover.

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