The takeover race continues. With the acquisition of the Swiss company Syngenta, Chemchina wants to grow strongly in the expanding market of agrochemicals and pest management. After first takeover rumors in December, there is now a concrete offer.
Basel/Switzerland – After the Mega-Fusion of Dow Chemicals and DuPont, Syngenta came to the center of attention of analysts as a potential takeover candidate in 2015 itself. Apart from Chemchina even Monsanto was interested. Now the Chinese are getting serious about their takeover plans which had been already announced in December. The Chinese chemical giant will spend a total of 43 billion Dollars for the Swiss model company Syngenta. Chemchina is offering 465 dollars per share and a one-time extra dividend of five franks. In addition, every shareholder was further entitled to the proposed ordinary dividend for May of CHF 11, says the company.
Basel seems to be quite satisfied with this offer: The supervisory board at Syngenta had spoken at the beginning of the month about a corresponding transaction. If shareholders opt for the sale, Syngenta may completely belong to Chemchina already by the end of 2016. Thus the state-run company continues its aggressive growth trajectory: A few weeks ago the Chinese took over the German specialist engineering company Kraus Maffei for 925 million Euros. In the pest management sector Chemchina had already absorbed Adama from Israel in 2011.
So, Where Does Syngenta go From Here?
The current management of Syngenta will continue to lead, according to the company. However after succesful takeover, Chemchina’s Chairman of the Board of Directors, Ren Jianxin will also lead the Syngenta supervisory board.
The former company management also agrees with this development: “With this offer, Chemchina acknowledges the quality and the potential of the business of Syngenta. It includes cutting-edge research, development and production in our sector and the competences of our employees all over the world”, explained Michel Demaré, president of the Board of Directors at Syngenta.
“The transaction minimises the risks with respect to operations; it enables further growth, especially in China and other developing countries, as well as long term investments in innovation. Syngenta remains Syngenta with headquarters in Switzerland. It underlines the attractiveness of this country as a company location.
Buying to Sell - What does Chemchina want?
The question of whether Chemchina will commit in the long-term to Syngenta is still justified: However, going public in the future is on the agenda for the Chinese. Market experts now assume that the company management in Beijing is waiting for the prices of crop protection solutions to increase in order to subsequently sell the company at a profit.
Nevertheless, Chemchina was not the only company interested for a takeover. On page 2 you can read why one of the biggest pest management specialists had a tough time with Syngenta...
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