A potential merger between Syngenta and China National Chemical Corp. moved a step closer to reality after Syngenta’s board voiced its support of a potential sale, according to a Bloomberg news report citing people familiar with the matter.
Syngenta’s board met earlier this month and voted in favor of pursuing advanced takeover talks, said the sources, who asked not to be identified because discussions are private. Their approval could pave the way for a formal agreement to be reached by early February, they said. While negotiations continue, talks could still fall apart, and it can’t be ruled out that counter bids may appear, they said.
According to reports, ChemChina offered about 470 Swiss francs a share in cash for Syngenta, which would give the company a market value of about 44 billion francs ($43.8 billion).
However, a group of Syngenta shareholders said it opposes any sale to ChemChina and called for the ousting of the company’s leadership. The managing director of the opposition group says it was speaking after surveying holders of about 10 percent of Syngenta’s capital.
Syngenta Chairman Michel Demare said the company is looking at multiple opportunities. In addition to established market leaders such as BASF, Bayer and Monsanto, “you have to consider ChemChina as a potential bidder too,” he said.
Lack of seed technology is a key reason that China’s corn yields are half those in the U.S., according to Jason Miner, an analyst at Bloomberg Intelligence.
Speculation is mounting that Syngenta will do a deal following last month’s merger agreement between Dow Chemical Co. and DuPont Co., which will create a company with a market value of more than $100 billion and the world’s largest agriculture business, Bloomberg reported. Syngenta last year rebuffed a takeover attempt by Monsanto.
Monsanto is discussing internally the merits of a new offer, as well as opportunities to acquire crop-chemical assets from other companies, Chief Operating Officer Brett Begemann told reporters in November.