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Landmark $43 Billion Takeover Of Syngenta Clinched By ChemChina

Landmark $43 Billion Takeover Of Syngenta Clinched By ChemChina
ChemChina and Sygenta said that to clinch its $43 billion takeover of the Swiss pesticides and seeds group, ChemChina has won more than enough support from Syngenta shareholders.
China's desire to use Syngenta's portfolio of top-tier chemicals and patent-protected seeds to improve domestic agricultural output prompted the deal which was announced in February 2016. This is the biggest foreign takeover to date by any Chinese company.
The international market for agricultural chemicals, seeds and fertilisers is being reshaped and reorganized by a number of mergers and acquisitions and this deal is just one of several such deals happening in the industry.
Bayer's proposed plan to merge with Monsanto and a $130 billion proposed merger of Dow Chemical and DuPont are among the other larger deals in the sector.
however, fears among farmers that the pipeline for new herbicides and pesticides might slow has been triggered by the trend toward market consolidation.  As a condition for approving the Syngenta deal, regulators have required some divestments.
Both the companies said in a joint statement that marking over and above the minimum threshold of 67 percent support, around 80.7 percent of Syngenta shares have been tendered, based on preliminary numbers.
$465 per share is the agreed offer. Syngenta shares rose 0.4 percent in early trade on Friday to 461.20 francs after closing on Thursday at 459 Swiss francs ($464.5).
After the payment of a special 5-franc dividend to holders of Swiss-listed shares on May 16 and the start of an additional acceptance period for shareholders, the transaction is set to close on May 18. The he special dividend in July will be available for holders of U.S.-listed depositor receipts.
Syngenta share depository receipts will be delisted from the New York Stock Exchange and its shares will be delisted from the Swiss bourse.
While stressing that Syngenta would remain a Swiss-based global company while under Chinese ownership, its Chief Executive Erik Fyrwald played down the transition from publicly listed group to becoming part of a Chinese state enterprise.
"It is very important to understand that this is a financial transaction," he told broadcaster CNBC in an interview.
Helping to overhaul Chinese agriculture, which he called very much behind the global standard and giving Syngenta a long-term shareholder to accompany it during the 12 years it typically takes to discover and launch new products are the two major changes that Erik Fyrwald sees following the deal.
With a squeeze-out of remaining shareholders to follow if needed in June, he expected the acceptance rate to easily surpass 90 percent, he said.
While refinancing the company after the transaction closed was still being discussed, funding for the acquisition was clear and irrevocable.
"I am very confident we are going to have a strong balance sheet as agreed," he said, with an investment-grade rating that would let it pursue market share growth, investments, capital spending and acquisitions.
Under such brand names as Acuron, Axial, Beacon and Callisto, Syngenta sells its products in more than 90 countries. It sells seeds such as cereals, corn, rice, soybeans and vegetables.

Christopher J. Mitchell

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