ChemChina Nears Deal to Buy Syngenta Stake -- 2nd Update
February 02 2016 - 10:00AM
Dow Jones News
By Rick Carew, Shayndi Raice and Eyk Henning
China National Chemical Corp. is nearing an offer to buy
Syngenta AG that values the Swiss pesticide company at roughly $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 ($460.90) 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.
John Revill contributed to this article.
Write to Rick Carew at rick.carew@wsj.com, Shayndi Raice at
shayndi.raice@wsj.com and Eyk Henning at eyk.henning@wsj.com
(END) Dow Jones Newswires
February 02, 2016 09:45 ET (14:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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