ChemChina lifts Syngenta stake to 94.7%

A researcher uses a pipette to develop an assay to detect a specific gene of corn at a lab in the Syngenta Biotech Center in Beijing. [Photo/Agencies]

China National Chemical Corp, known as ChemChina, has completed the second settlement of its tender offers for Basel-based Syngenta AG, increasing its stake to 94.7 percent, the group announced on Thursday.

ChemChina plans to delist Syngenta's shares on the Zurich-based SIX Swiss Exchange and the New York Stock Exchange as soon as permitted by law and applicable regulations, the group said in a statement on Thursday.

Shareholders who tendered their shares after May 4 received the consideration of $465 per share, and holders of American Depositary Shares, who tendered them after May 4 received $93 per ADS, on Wednesday.

Syngenta is the largest European producer of hybrid seeds and crop protection products. Supported by 28,000 employees and more than 13,000 patents, it operates 107 production facilities and 119 research and development units in more than 90 countries and regions.

The deal has been reviewed and approved by commerce authorities and antitrust agencies of 20 countries and regions, including the United States, the European Commission and Brazil.

"The completion of this deal will help ChemChina become one of the world's largest suppliers of pesticides and other crop-care chemicals," said Li Guoxiang, a researcher at the rural development institute of the Beijing-based Chinese Academy of Social Sciences.

Li said Dow Chemical Co's merger with DuPont Co and Bayer AG's purchase of Monsanto Co, which occurred in the past two years, would mean that ChemChina would face strong competitors, as the top six international suppliers, including Syngenta and BASF SE, have all been vying for market share and financial resources to push the research and development of new products.

Zhang Xiaoping, director for China at the US Soybean Export Council, said ChemChina could use Syngenta's rich experience and resources in intellectual property, risk control and environmental management to bring its products to global markets.

Syngenta's sales revenue amounted to $12.8 billion in the global market in 2016. The Swiss company has invested more than $360 million in China and employs more than 2,000 people.

This transaction preserves choice and competition in the industry, as it allows Syngenta to maintain its strategy, management, people and culture. It preserves the company's core business model so it can continue to operate independently.

The central government has pinned high hopes on reforms to solve structural issues in the agricultural sector, where some agricultural products are oversupplied while others rely heavily on imports.

China has been encouraging its companies to use both domestic and global resources to ensure the country's grain and food security in its agricultural policy.

Beijing-headquartered ChemChina possesses production, research and development, and marketing systems in 150 countries and regions. Materials sciences, life sciences, high-end manufacturing and basic chemicals are its main businesses.

It has also acquired nine companies in France, the United Kingdom, Israel, Italy and Germany.