Brought to you by Investec Switzerland.
Syngenta AG Chairman Michel Demare said his company is in “advanced, formal and intense negotiations” with competitors about a possible combination, as the global agrochemicals industry consolidates and the merger of DuPont. Co. and Dow Chemical Co. adds pressure on others to review their standalone strategy.
Speaking extensively in an interview with Swiss newspaper Finanz und Wirtschaft, Demare said “things are fluid” and that “something can happen anytime” when asked if there was an offer on the table. Asked specifically about talks with Monsanto Co., the U.S. rival that tried and failed to buy Syngenta earlier this year, and China National Chemical Corp, which Bloomberg News reported has also made an approach, Demare said he is in contact with more companies and that “the whole industry is talking to each other.” Demare’s comments are his most concrete acknowledgment of talks about a possible tie-up with a rival.
As pressure builds on shareholders to boost returns, options include going on the offensive with an acquisition, merging with a competitor or putting the company up for sale, Demare said. The chairman said an approach by ChemChina would offer “quite some potential synergies” and that the country has shown it can be a “serious partner” when it comes to major takeovers in Europe. Representatives at Syngenta in Basel couldn’t immediately be reached to confirm Demare’s comments.
Demare said any talks may take “months” to complete, from discussing “the values and the principles” to hashing out the details. Any suitor that would be willing to offer 470 Swiss francs a share “would get us closer to where it should be,” he said. Syngenta closed at 384.1 Swiss francs on Tuesday, valuing the company at about 35.7 billion francs ($36.17 billion). ChemChina, as China National Chemical Corp is also known, offered to buy 70 percent of Syngenta now, with an option to acquire the remaining 30 percent, people with knowledge of the matter said last week. In addition to the two-step acquisition, the Chinese firm also made an alternative proposal to buy all of Syngenta, one of the people said. ChemChina offered about 470 Swiss francs a share in cash for 70 percent of Syngenta, one of the people said. Bloomberg article.