Syngenta Gains as ChemChina Report Spurs Bets on Bidding War

  • Offer could trigger bidding war with Monsanto, Bernstein says
  • Potential Dow Chemical, DuPont merger may spark consolidation

Syngenta AG, the world’s largest pesticide maker, rose the most in almost a month as investors bet on a renewed takeover bid from China National Chemical Corp., known as ChemChina.

ChemChina is considering a sweetened bid of 44 billion francs ($44.6 billion) for Syngenta in a deal that might be announced Friday, Benzinga reported, without naming its source. The state-owned Chinese company had sought to buy Syngenta for 41.7 billion francs as recently as last month, people familiar with the matter told Bloomberg at the time. The shares closed in Zurich 3.5 percent higher at 378.80 Swiss francs, the most since Nov. 13.

The prospects of a merger of the two biggest U.S. chemical makers Dow Chemical Co. and DuPont Co. may trigger a wave of consolidation in the industry as competitors re-position themselves to face increased competition. Syngenta, based in Basel, Switzerland, is also likely to see renewed interest from U.S. rival Monsanto Co., according to analysts.

“An offer from ChemChina could trigger a counteroffer from Monsanto,” Jeremy Redenius and Jonas Oxgaard, chemical analysts at Bernstein, said in a Thursday note to investors. “But they will struggle to match the price and cash component of ChemChina’s bid despite the deal creating significant synergies.”

Syngenta has so far fended off at least four takeover attempts by Monsanto. The U.S. company’s chief operating officer Brett Begemann said last month that the seed maker is discussing internally the merits of a new offer for Syngenta as well as opportunities to acquire crop-chemical assets from other companies. The comments came after Monsanto had withdrawn a $46.6 billion proposed takeover in August.

Begemann also said that while Bayer AG isn’t interested in selling its pesticide business, Monsanto could still pursue licensing deals with the German company. He declined to disclose specific deal talks the company has had.

Bernstein’s Redenius said BASF SE’s agricultural chemicals unit could be Monsanto’s next target should Syngenta be sold to ChemChina.

Monsanto couldn’t immediately be reached and a spokeswoman for BASF declined to comment on a potential tie-up when contacted by Bloomberg on Thursday. A spokeswoman for ChemChina wasn’t immediately available, and Syngenta had no immediate response.

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