ChemChina offers $43 billion for Switzerland’s Syngenta

State-owned ChemChina offered to pay more than $43 billion for Swiss pesticide and seed maker Syngenta, in the largest ever takeover by a Chinese company.

Basel-based Syngenta said in a statement that ChemChina’s cash offer is worth the equivalent of 480 francs ($482) a share, including a special 5 franc dividend for shareholders if the deal goes through. ChemChina has offered about $43.7 billion francs ($42.8 billion) for the stake, which comes to 470 francs ($460.5) per share in cash, a 24% premium on Syngenta’s last price of 378.4 francs, reported on February 1.

It’s a healthy valuation for a company whose sales and profits have been declining amid a global downturn in commodity valuations. 70 in early deals, up 6.2% on the day, but well short of the ChemChina offer. Mr. Demaré is set to be replaced by ChemChina chief Ren Jianxin upon the deal’s completion.

ChemChina chairman Ren Jianxin said the deal was “all about growth”. HSBC is set to have played an important part in warming up Syngenta’s management to its Chinese suitor. The transaction is expected to conclude at year’s end.

June 2014: Bloomberg reports Monsanto Co. had explored, but was no longer pursuing, a takeover of Syngenta. It also would be the biggest cross-border deal involving an Asia-Pacific company.

Created out of assets under the former ministry of chemical industry in 2004, the company has grown to include speciality chemicals, oil refining, agricultural chemicals, tyre and rubber products and chemical processing equipment.

Monsanto can try to argue that ChemChina’s bid is problematic anyway. Syngenta is a major provider of seeds and pesticides to the U.S. market.

As well as antitrust authorities, a USA interagency committee known as CFIUS has the power to block deals that pose a threat to US national security. He will become chairman of the Swiss company and four of its existing directors will be on the 10-member board. According to Demaré, Syngenta will remain Syngenta and will continue to be headquartered in Switzerland.

In the ag sector itself, Chinese buyers have found themselves blocked from many foreign land deals – including the high profile sale of Australia’s Kidman cattle station, the world’s largest spanning 101,411 square kilometres, an area the size of Hungary. But its $46 billion effort was rebuffed.

A broad range of Chinese companies has fueled the record start to the year.

Last month, Monsanto’s CEO said attempts to re-engage Syngenta about a potential takeover had been hard but that he believed there was still “a significant opportunity” for integration between the companies.

Syngenta shareholders were miffed after the Monsanto talks ceased last August, and voted with their feet.

ChemChina has a view to an IPO of the business in the years to come, the company noted.