Syngenta Rejects $42 Billion Takover Offer from China’s ChemChina – Bloomberg
Bloomberg reports that Syngenta, the world’s largest agrichemical company, has rejected a $42 billion takeover bid offered by China’s state-owned China National Chemical Co. due to regulatory concerns.
After rejecting a $47 billion offer from Monsanto, and the stepping down of its chief executive, Syngenta has been under pressure to raise value for its shareholders, and is reportedly still involved in talks with ChemChina among other perspective bidders, with a possible deal within weeks, according to unidentified sources.
ChemChina currently owns a 5% stake in Syngenta through its Israeli generic pesticide subsidiary, Adama, but if ChemChina could gain control of Syngenta’s 19% of the global market, it would instantly become a global leader in the space, achieving its goals of global expansion.
ChemChina’s offer placed a value of 449 Swiss francs per share, or US$41.72 billion, on Syngenta. During separate talks earlier this year, Monsanto placed the same value on the agricultural chemical giant, but offered to pay 55% of the value in shares of the combined group.
Syngenta shares were down by more than 8% since Monsanto abandoned its takeover talks with the agrichemical giant, however, Syngenta’s Swiss-listed shares were trading up 7.2% at 370.90 Swiss francs as news broke of ChemChina’s takeover offer. Some shareholders have called out Syngenta’s management for its defensive position it has taken in negotiations, and have called into doubt the company’s ability to increase value for shareholders as global agricultural commodity demand remains soft. In response, the agrichemical group announced in September that it would agree to sell its vegetable seed business to fund the buy-back of $2 billion in stock.