- Taking company private would follow same path as Adama
- Syngenta management team to remain in place after takeover
China National Chemical Corp., which is poised to announce the $43 billion acquisition of Syngenta AG, is considering delisting shares of the Swiss pesticide maker from Zurich’s stock exchange, according to people with knowledge of the situation.
ChemChina plans to make a tender offer for all of Syngenta’s shares and would delist the company if it gets sufficient investor acceptance, the people said, asking not to be named because the discussions are private. ChemChina will likely keep management largely intact, they said. The two companies may announce a deal as soon as tomorrow, said people with knowledge of the deliberations.
Syngenta American depositary receipts rose 6.3 percent to $78.63 at 1:44 p.m. in New York. In Zurich, shares closed 3.7 percent higher to 392.30 francs.
Delisting Syngenta would mirror ChemChina’s strategy with its other agrochemical holding, Adama Agricultural Solutions Ltd. It bought the Israeli company in 2011, and took it private. A ChemChina takeover opens the door for Syngenta to tap one of the fastest-growing markets for pesticides and insecticides. For China, acquiring biotechnology is a priority as the country looks for ways to feed its booming population.
‘Nationalization’ by China
A spokeswoman for Syngenta declined to comment on a possible delisting. A representative for ChemChina couldn’t be immediately reached for comment on a delisting outside of regular business hours. Earlier today, an official for ChemChina declined to comment on a takeover.
“We expect this deal would result in nationalization of Syngenta by the People’s Republic of China,” Andrew Benson, an analyst at Citigroup, in London, said in a note on Feb. 1 that explored potential options for Syngenta.
Syngenta’s investors have been pressuring the company to find a buyer. Dow Chemical Co.’s plans to buy DuPont Co. broadsided other players in the agrochemical industry including Syngenta, who had hoped for more time to bolster its earnings and market position to then negotiate with potential partners on a stronger footing. A group of investors wrote Syngenta in December to ask the company to talk to “all interested suitors.”
Monsanto Co. repeatedly tried to buy Syngenta, which rejected the offers. Some investors criticized management for not engaging with its U.S. suitor, heaping pressure on the Swiss company’s management and leading to the resignation of Chief Executive Officer Mike Mack in October.