Chinese state-owned chemicals business makes agreed £30bn Syngenta takeover offer

China has a relatively small proportion of the world’s arable land, and intensive farming has led to widespread pollution from chemical fertilizers.

As well as domination of the Chinese market, Syngenta will provide global access to farmers from Brazil to the UK.

The agreement for Syngenta comes as China’s slowing economy has shaken global equity markets and contributed to a commodities crash that has battered company valuations world-wide and spurred intense deals activity.

The agreed takeover offer was announced by the companies on Wednesday and marks the biggest ever foreign acquisition by a Chinese company.

Last month, ChemChina bought German machinery maker KraussMaffei for about $1 billion and took a 12 percent stake in Swiss energy trader Mercuria.

“Syngenta has never been valued so highly”.

To seal the deal, the companies now have to cross potentially high regulatory hurdles in the U.S.-about a quarter of Syngenta’s sales come from North America-and elsewhere. “We will definitely tender our shares at the offered price”.

Similarly, ChemChina said in its press release that it is “fully supportive of Syngenta’s intactness in its operations, management and employees, including keeping its headquarters in Basel, Switzerland”.

China CITIC Bank International, a unit of China CITIC Bank Corp Ltd, is seen leading the $30 billion recourse debt, while HSBC would lead the $13 billion non-recourse lending, LPC reported.

The US regulator, the Committee on Foreign Investment in the US (CIFUS) focuses exclusively on national security concerns.

If completed, the deal would help chairman Ren Jianxin (任建新) transform ChemChina into the world’s biggest supplier of pesticides and agrochemicals, while snatching an asset coveted by Saint Louis-based Monsanto Co.

The company’s board of directors said that it has unanimously recommended the offer to shareholders as the deal is respectful of stakeholders’ interests.

ChemChina offered to buy Syngenta for more than $43 billion, offering $465 cash a share, according to a statement on Wednesday.

Syngenta remains the largest European producer of hybrid seeds and crop protection products.

Beijing is seeking to cut reliance on food imports in the context of limited farmland, a growing population and higher meat consumption. China’s combined consumption of pork, beef and poultry has grown by an average 1.7 million tonnes a year for the past decade, placing further stress on feed grain supplies.

The realignment of the global chemical industry has been accelerating since US powerhouses Dow Chemical and DuPont announced a megamerger late past year.

Prior to the arrangement with Syngenta, ChemChina has acquired nine industrial companies in France, the United Kingdom, Israel, Italy and Germany.