China National Chemical Corp (ChemChina, 中國化工) improved its offer to buy Syngenta AG, proposing a complex two-stage takeover that would mark the biggest-ever acquisition by a Chinese company, people with knowledge of the matter said.
State-owned ChemChina offered to purchase 70 percent of Syngenta now, with an option to acquire the remaining 30 percent of the company at a later date, said the people, who asked not to be identified because the information is private.
Basel-based Syngenta, the world’s largest pesticide maker, is to hold a board meeting before the end of the year to vote on the deal, the people said.
Photo: Reuters
While talks are advanced, no agreement has been reached and there is no guarantee a deal would be completed, they said.
The architecture of the proposal would allow ChemChina to work with Syngenta to integrate the two businesses before assuming complete control of the Swiss company, the people said.
During the discussions, ChemChina proposed a number of similarly structured deals, whereby it would acquire Syngenta in two stages. Syngenta’s US depositary receipts jumped as much as 8.1 percent in after-hours trading on Friday.
ChemChina offered about 470 Swiss francs per share for 70 percent of Syngenta, one of the people said. At that price, the company would have a market value of about US$44 billion. ChemChina revised the proposal after its previous cash offer of 449 francs per share was deemed too low. Syngenta’s shares closed at 374.5 francs on Friday.
Pressure is growing for Syngenta to do a deal in the aftermath of an agreement between Dow Chemical Co and DuPont Co to merge, creating a company with a market value of more than US$100 billion and the world’s largest agriculture business. That deal might trigger a wave of consolidation in the industry as competitors dash to reposition themselves.
ChemChina Chairman Ren Jianxin (任建新) met with Syngenta in Europe last week to discuss a revised proposal, people familiar with the matter said.
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