ChemChina Said to Approach Funds Including CIC on Syngenta

  • ChemChina contacted sovereign wealth funds to back offer
  • ChemChina said to have made $41 billion offer for Syngenta

China National Chemical Corp. approached sovereign wealth funds including China Investment Corp. to help pay for a potential acquisition of Syngenta AG, which would be the biggest Chinese acquisition ever if it goes ahead, people with knowledge of the matter said.

ChemChina, as the state-owned company is known, contacted government-run investment funds in Asia to gauge their interest in contributing money for an offer, people familiar with the matter said, asking not to be named because the talks are private. The funds, which could help ChemChina finance such a large purchase, haven’t yet agreed to participate, the people said.

ChemChina is in talks to buy the Swiss pesticide maker, people familiar with the matter said last week. The Chinese company offered 449 francs a share in cash, valuing the Swiss pesticide maker at 41.7 billion francs ($41.4 billion), one of the people said. Syngenta said the figure was too low, but it served as a basis for discussions, the person said.

ChemChina declined to comment. CIC representatives didn’t immediately respond to requests for comment.

Syngenta shares fell 1.1 francs to 363.10 francs in Zurich trading Monday. The stock had gained as much as 11.3 percent on Nov. 13 when ChemChina’s offer was reported.

As China’s economy has surged in recent years, its companies increasingly have been looking overseas for acquisitions. ChemChina and other investors this year agreed to buy Italian tiremaker Pirelli & C. SpA. Chinese President Xi Jinping is trying to boost agricultural output to maintain self-sufficiency as a growing middle class consumes more grain-intensive meat and farmland is converted to housing and golf courses.

ChemChina’s approach comes after Basel-based Syngenta snubbed offers from Monsanto Co., the world’s largest seed producer, which drew the ire of some investors. While talks with the Chinese are ongoing, the Swiss company is also exploring potential transactions with other competitors, the people said.

The prospect of a Monsanto-Syngenta combination has triggered deal talks among the world’s top producers of pesticides and seeds. The chief executive officers of Dow Chemical Co. and DuPont Co. said last month that they’re weighing options for their own agriculture businesses as the global market for seeds and crop chemicals consolidates.

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