Syngenta Board Seeks Approval of ChemChina’s $43 Billion Offer
Six months ago, Syngenta said no to a $47 billion takeover attempt from Monsanto, arguing it was too risky.
But times have changed. Commodities prices have slumped, decreasing the chances of a big payday for Syngenta, one of the world’s biggest manufacturers of agricultural chemicals and seeds. China is on the hunt for strategic resource deals to provide for the long-term security of its huge population.
So when when the state-owned China National Chemical Corporation offered to buy Syngenta for $43 billion — but leave Syngenta’s Swiss headquarters and management in place — the answer was an enthusiastic yes.
因此当中国国企中国化工集团公司(China National Chemical Corporation)提出以430亿美元（约合2820亿元人民币）的价格收购先正达，并保留先正达的瑞士总部和管理层，他们收到了热切的肯定答复。
The transaction, announced Wednesday, would be the largest acquisition of a foreign company by a Chinese business and the latest in a string of deals by the company, known as ChemChina. It also would be the biggest cross-border deal involving an Asia-Pacific company, according to data from Dealogic.
Under the terms of the deal, ChemChina would pay $465 a share, plus a special dividend of five Swiss francs, or about $4.90, upon closing. That would be the equivalent of 480 francs a share, representing a 22 percent premium to Syngenta’s closing price on Tuesday.
Syngenta’s board of directors said it was unanimously recommending that Syngenta’s shareholders accept the offer.
As part of the agreement, Syngenta would remain mostly independent and continue to be run by its existing management. The all-cash deal requires at least two-thirds of Syngenta’s shareholders to agree to sell their stock to ChemChina.
“The easiest way to say it is that Syngenta will remain Syngenta,” Michel Demaré, the Syngenta chairman, said in a video posted to the company’s website. “We will keep the same name. We will continue to be headquartered in Switzerland. And customers around the world will still have access and be offered the same range of innovative products that will help them increase their productivity and their yields.”
Syngenta’s share price jumped more than 6 percent in early trading in Zurich on Wednesday after the announcement.
Syngenta, based in Basel, Switzerland, is one of the world’s largest producers of agricultural chemicals, including insecticides, fungicides, herbicides and seeds. The company reported sales of $13.4 billion in 2015 and employs more than 28,000 people in more than 90 countries.
It was created in November 2000 by the merger of the agribusinesses of Novartis and AstraZeneca.
The deal comes as China grapples with its long-held resistance to genetically modified crops. China generally does not allow the growth of genetically modified crops for human consumption, though its farmers and processors use them for oils and animal feed. Genetically modified crops face widespread public skepticism in a country where food quality is a constant fear.
Still, Chinese leaders have taken steps to nurture a homegrown genetically modified crop industry. Two years ago it also began to make public efforts to ease that skepticism — a function of a time when it may need GMO crops to feed its growing population.
The country pulls out nearly one-third less wheat, corn or other grains per hectare than the United States, according to United Nations data. A smaller portion of its land is arable because of overcrowding, a harsh environment in the country’s western region and pollution.
Even within its farmland, China struggled with its legacy of industrialization, fast growth and lax regulatory enforcement — in 2014 authorities said nearly one-fifth of its arable land was polluted. Those factors have spurred China to rely increasingly on imports, stoking concern among some officials in Beijing about dependence on foreign supplies of food.
About six months ago, Monsanto abandoned a dogged pursuit of Syngenta, which first came to light in May of last year.
Monsanto had offered to pay as much as $47 billion for Syngenta, but the Swiss company’s directors rejected its approaches. Syngenta’s board said at the time that Monsanto’s bid did not account for the risk that regulators would scuttle the deal.
After Monsanto walked away, Syngenta said it would divest itself of its global vegetable seed business and buy back stock to reassure shareholders. It also engaged in discussions with other suitors, including ChemChina.
Syngenta, already buffetted by low crop prices, has also had to deal with currency fluctuations, which pushed sales down 11 percent in 2015.
On Wednesday, Syngenta said it would no longer sell the vegetable seed business and would discontinue the share-buyback program.
Mr. Demaré said that being acquired by a Chinese buyer “shouldn’t raise any concern at all” and would allow the company to continue to pursue its strategy.
“With this transaction, Syngenta will be able to realize the full potential of its stand-alone strategy with an ambitious shareholder who will invest to make it happen,” he said. “It will also, at the same time, give us an enhanced market access to China.”
The ChemChina deal will still probably face significant regulatory scrutiny, particularly in Europe and the United States. But its structure offers Syngenta a degree of independence that was unlikely in a deal with Monsanto.
Under the plan, four of Syngenta’s existing directors would be part of its new 10-member board, and ChemChina said it would seek to publicly list a minority stake in Syngenta down the road.
The question remains whether regulators will block the deal, particularly in the United States. North America accounted for about 27 percent of Syngenta’s sales in 2015.
Because of Syngenta’s presence in America, the Committee on Foreign Investments in the United States, a government panel that reviews takeovers by foreign buyers, will probably take a close look at the transaction.
由于先正达在美国经营，美国负责审查外资并购的政府机构外国投资委员会(Committee on Foreign Investments)，恐怕会密切关注此次交易。
The committee raised “unforeseen concerns” in October about a similar deal in which Philips, the Dutch electronics giant, would sell a controlling stake in its automotive and LED components business to GO Scale Capital, an investment fund sponsored by GSR Ventures of China and Oak Investment Partners.
去年10月，该委员会对荷兰电子巨头飞利浦(Philips)的一桩类似交易提出了“未预见到的担忧”。当时菲利普欲将旗下的汽车和LED部件业务出售给GO Scale Capital，后者是中国的金沙江创业投资(GSR Ventures)与橡树投资伙伴(Oak Investment Partners)共同建立的投资基金。
“ChemChina and Syngenta are highly complementary businesses with relatively limited overlaps in products,” Ren Jianxin, the ChemChina chairman, said in a video. “We will work closely with all of the regulatory agencies involved, and we are confident that we will receive regulatory approval.”
Last month, Philips said it and GO Scale Capital had terminated their agreement after failing to win regulatory approval.
上个月，飞利浦表示，该公司与GO Scale Capital由于未能取得监管机构批准而终止了协议。
The Syngenta deal would mark the latest foreign transaction by ChemChina, and comes amid a consolidation push in the chemicals industry that saw the industry titans Dow Chemical and DuPont agree to combine in December.
China has been actively securing resources deals and consistently tops the rankings when it comes to buying companies in commodities and agribusiness.
In 2015, Chinese companies bought up overseas companies in the oil, gas, mining and agribusiness sectors worth $12.6 billion, according to Dealogic.
Since acquiring Adisseo of France in 2006, ChemChina itself has engaged in more than a half-dozen acquisitions of companies in Europe, the Middle East and Australia.
It recently took a minority stake in Mercuria, a Swiss energy and commodities company, in a move to diversify its portfolio and expand into the energy sector.
Last year, ChemChina bought Pirelli, the Italian tire maker, for 7.1 billion euros, or about $7.7 billion. And just last month it sealed a deal for KraussMaffei, a German manufacturer of plastics and rubber processing machinery, for about $1 billion.
“The discussions between our two companies have been friendly, constructive and cooperative, and we are delighted that this collaboration has led to the agreement announced today,” Mr. Ren said in a news release. “We will continue to work alongside the management and employees of Syngenta to maintain the company’s leading competitive edge in the global agricultural technology field.”
Dyalco, JPMorgan Chase, Goldman Sachs and UBS and the law firms Bär & Karrer and Davis Polk advised Syngenta on the transaction. HSBC, China Citic Bank International and the law firms Simpson Thacher & Bartlett and Homburger advised ChemChina, and Credit Suisse served as the tender agent.
在此次交易中Dyalco、摩根大通(JPMorgan Chase)、高盛(Goldman Sachs)、瑞银(UBS)，以及Bär & Karrer和Davis Polk这两家律师事务所为先正达充当顾问。汇丰银行(HSBC)、中信银行国际公司(China Citic Bank International)，以及盛信律师事务所(Simpson Thacher & Bartlett)和衡博律师事务所(Homburger)为中国化工充当顾问，瑞信(Credit Suisse)为要约代理。