Update: ChemChina’s $43 billion cash bid to acquire Syngenta was green lighted by Syngenta’s board of directors Wednesday, making it the largest acquisition of a foreign company by Chinese business.
As part of the deal, ChemChina will pay $465 plus a special dividend of $4.91 per share. The deal is currently waiting for Syngenta shareholder approval and is expected to conclude by the end of the year.
Syngenta, a Swiss pesticide and seed company, will maintain its Switzerland headquarters and management structure after the acquisition. Syngenta does not expect regulatory restraint in the European Union or in Switzerland, but has submitted a voluntary filing to the Committee on Foreign Investment in the United States.
China National Chemical Corporation (ChemChina) is again considering acquiring Swiss crop chemical producer Syngenta AG, despite the pervious rejection of its $42 billion cash offer. A new offer has yet to be made, and the amount is unknown. If successful, the deal would not only be the largest Chinese acquisition ever, but will make ChemChina the leader in global crop chemical market.
ChemChina become the world’s seventh largest producer of crop chemicals in the world after acquiring Israeli generic pesticide maker ADAMA Agricultural Solutions Limited. Syngenta is currently the largest crop chemical producer in the world with 19 percent of the world market. Syngenta rejected the previous offer from ChemChina due to regulatory risk and a low valuation of Syngenta.
According to Bloomberg, ChemChina has approached Asian sovereign wealth funds including China Investment Corporation to help fund a new offer to Syngenta. ChemChina comes after Monsanto Co.’s withdraw of its $46 billion cash and stock offer to take over Syngenta. As a state-owned-enterprise, ChemChina’s possible acquisition of Syngenta would boost Chinese technological capabilities in grain production to adapt to changing diet and shrinking farmland in China.