• Ren traveled to Europe as firm weighs improved offer
  • Syngenta also holding informal discussions with Monsanto

China National Chemical Corp. Chairman Ren Jianxin met with Syngenta AG in Europe last week as the Chinese chemical firm moves ahead with a takeover plan, after rivals Dow Chemical Co. and DuPont Co. revealed plans to merge, according to people familiar with the matter. Syngenta’s shares jumped.

ChemChina is discussing a revised proposal to acquire the world’s largest pesticide maker, after its previous cash offer of 449 Swiss francs a share ($457) was deemed too low, the people said, asking not to be identified as the process isn’t public. No deal has been reached, and there is no guarantee that ChemChina will make a new offer, they said.

Even as negotiations with the Chinese company progress, Syngenta is also holding informal talks about a combination with U.S. peer Monsanto Co., almost four months after rebuffing the company’s $46.6 billion takeover proposal, two of the people said. 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 last month.

Syngenta would provide a route to market for Chinese agrochemical exports and increase the “sophistication” of agrochemicals in the domestic market, JPMorgan Chase & Co. said in a report published Tuesday. Antitrust issues would be “modest” with some overlap in fungicide markets in the Americas and insecticide in Europe, and may require the company to divest businesses with $300 million to $400 million in revenue, the report said.

“We find it hard to envisage a scenario whereby Syngenta doesn’t feature in an environment of consolidation, in some form," the analysts said in the report.

Basel-based Syngenta’s shares jumped as much as 4.3 percent, and closed up 2.2 percent at 373.40 Swiss francs, giving the company a market value of about 34.7 billion Swiss francs.

Industry Consolidation

Pressure is rising for Syngenta to do a deal in the aftermath of the Dow-DuPont agreement, which will create a company with a market value of about $120 billion and may trigger a wave of consolidation in the industry as competitors dash to reposition themselves.

Amid talks about a possible takeover, Syngenta is also evaluating buying assets that may come up for sale as a result of the Dow-DuPont merger, according to a person with knowledge of the matter. German rival BASF SE is also analyzing potential acquisitions of these assets, a separate person said. 

The combined company may need to divest certain product lines to win antitrust approval for the deal, according to Bloomberg Intelligence. DuPont Chief Executive Officer Edward Breen has said that only “very minor” divestitures would result from the merger, if any.

A representative for ChemChina didn’t respond to calls and e-mails seeking comment. A spokeswoman for Syngenta declined to comment as did a representative for BASF.

“We continue to believe there is room for additional consolidation, and we remain an ideal partner,” Sara Miller, a spokeswoman for Monsanto, said in a statement. “In our view, any option needs to hit three critical objectives: it must be a strong, strategic fit, it must provide synergistic value, and it must be additive to our current plan, providing additional growth opportunity.”

Some parties to the deal are concerned about the Chinese company’s ability to raise enough financing to increase its offer and complete the transaction, two people with knowledge of the matter said. ChemChina approached sovereign wealth funds including China Investment Corp. to help pay for a potential acquisition of Syngenta, people familiar with the matter had said in November.