ChemChina Said to Seek Jumbo Commitments on Syngenta Bridge Loanby
Banks asked to contribute $5 billion each to acquisition loan
Chinese borrowers' offshore M&A loans on track for new record
China National Chemical Corp., which agreed this week to buy Swiss seed and pesticide maker Syngenta AG for $43 billion, is inviting banks to join a bridge loan of as much as $25 billion, people with knowledge of the matter said.
ChemChina is seeking commitments of about $5 billion each from four or five lenders to fund what would be the largest acquisition by a Chinese firm, according to the people. HSBC Holdings Plc and China Citic Bank International Ltd., ChemChina’s financial advisers on the deal, are among those participating in the so-called club facility, the people said, asking not to be identified because they aren’t authorized to speak publicly.
A commitment of $5 billion from each bank would represent one of the largest ticket sizes on record for a syndicated loan, according to data compiled by Bloomberg. Anheuser-Busch InBev NV’s $75 billion loan in November backing its SABMiller Plc acquisition, which was shared among 21 lenders, asked top-level banks to commit $4 billion apiece, the data show.
Chinese borrowers’ offshore acquisition loans are on track to set another record this year after hitting a fresh high in 2015. The pipeline for Chinese offshore M&A loans already stood at $16 billion before the ChemChina deal, compared with the $23.3 billion borrowed in 2015, the Bloomberg-compiled data show.
ChemChina offered $465 a share in cash to acquire Syngenta, about 20 percent higher than the stock’s last close, according to a statement Wednesday. Representatives for ChemChina, Citic Bank International and HSBC declined to comment.
The bridge loan backing the Syngenta purchase would be ChemChina’s second syndicated deal within a month and its fourth such borrowing in less than a year. The Chinese state-owned enterprise is now raising a five-year, 625 million-euro loan to fund its purchase of German machinery maker KraussMaffei Group, people with knowledge of the matter said earlier.