China National Chemical Corp (ChemChina, 中國化工) is in talks to buy Swiss pesticide maker Syngenta AG in what would be the largest acquisition ever by a Chinese company, people with knowledge of the matter said.
ChemChina, as the state-owned company is known, offered about 449 Swiss francs per share in cash, which values Syngenta at SF41.7 billion (US$41.6 billion), said one of the people, who asked not to be identified because the information is private.
Syngenta said the figure was too low, citing the regulatory risks to a deal, but it served as a basis for discussions, the person said.
The Basel, Switzerland-based company spurned a cash and stock offer at the same price this year from Monsanto Co, as well as a subsequent SF470 per share bid from the US suitor.
While a deal is not imminent, the two sides are still talking and an agreement could be reached in the next few weeks, the people said.
Syngenta, the world’s largest pesticide producer, is also talking to other potential suitors as it explores options, the people said.
Talks might fall apart and Syngenta might decide to stay independent or seek acquisitions of its own, the people said.
ChemChina said it could not immediately comment in an e-mail response to questions. Syngenta representatives did not respond to requests for comment.
Syngenta shares soared 9.9 percent to SF380.20 at 9:05am in Zurich. The stock advanced as much as 11 percent, the biggest intraday gain since May 8.
In March, ChemChina agreed to buy a 26.2 percent stake in Pirelli & C SpA from the Italian tiremaker’s largest shareholder in a deal that valued the target at about US$7.7 billion. ChemChina and other buyers then made a public tender offer for the rest of the company, a deal that closed this month.
The Swiss government has typically abstained from commenting on takeovers, and has sought to cultivate economic ties with China. Last year, Switzerland became the second European country after Iceland to sign a free-trade agreement with China, stealing a march on European and US rivals.
A deal with Syngenta would give China a major position in the global agriculture industry, which is increasingly important as the nation imports more food.
Last month, Syngenta named chief financial officer John Ramsay as provisional CEO to replace Mike Mack, who quit suddenly.
Mack faced shareholder criticism after he refused to engage in talks with Monsanto over its takeover approach. Syngenta rejected the bids for being too low and failing to recognize fully its prospects and the threat of antitrust hurdles.
Monsanto, the world’s largest seed producer, withdrew its offer on Aug. 26 and has said it plans to seek acquisitions elsewhere.
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