China’s state-owned ChemChina will make an agreed $43bn bid for Swiss seeds and pesticides group Syngenta marking the largest ever overseas acquisition by a Chinese firm.
The deal accelerates a shake-up in the global agrochemicals industry and is a setback for US seed company Monsanto, which made an unsuccessful $45bn move for Syngenta last year.
If completed, it would be China’s biggest outbound takeover deal, more than double CNOOC’s $17.7bn purchase of Canada’s Nexen in 2012.
Syngenta shares rose more than 6 per cent early on Wednesday, but, at around 418 Swiss francs, traded some way below the agreed offer price of $465 per share, equivalent to 480 francs.
Syngenta CEO John Ramsay said he sees no major regulatory hurdles, and noted that ChemChina had secure financing in place for the deal.
“I think the overall regulatory approvals will not be very challenging,” he said, adding he expected antitrust regulators to acknowledge the limited overlap in the two firms’ markets. He said the Committee on Foreign Investment in the United States, whose mandate is US national security, would not pose a major hurdle.
Mr Ramsay said the deal was “very appropriate and attractive” to Syngenta shareholders, but its board would have to consider any rival offers.
ChemChina, short for China National Chemical Corp, has agreed to pay about $3bn in fees to Syngenta should it fail to meet all requirements for the deal.
Syngenta will owe ChemChina about $1.5bn if the deal falls through for any reasons the Swiss group is accountable for, Mr Ramsay said.
“The discussions between our two companies have been friendly, constructive and co-operative, and we are delighted that this collaboration has led to the agreement announced today,” ChemChina Chairman Ren Jianxin said.
“We will continue to work alongside the management and employees of Syngenta to maintain the company’s leading competitive edge in the global agricultural technology field.”