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Board backs ChemChina bid to buy Syngenta

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Board backs ChemChina bid to buy Syngenta
Photo: AFP
08:17 CET+01:00
UPDATED: China National Chemical Corp on Wednesday offered to buy Syngenta for $43 billion, the Swiss pesticide giant said in a statement, in what would be the biggest-ever overseas acquisition by a Chinese firm.

Syngenta's board recommended the offer of $465 a share, plus a special dividend, to its shareholders, saying "the proposed transaction respects the interests of all stakeholders".
   
It said the deal "will enable further expansion of Syngenta's presence in emerging markets and notably in China."
   
The deal outstrips China Unicom Hong Kong Ltd's purchase of China Netcom Group Corp for $28 billion in 2008, according to data from Bloomberg.
   
An analyst at Germany's Baader Bank said prior to the announcement that a deal would be welcomed by investors "because it is entirely in cash".

However, "it could pose political problems," he said.
   
Last month, ChemChina said it would buy Germany's KraussMaffei Group, which makes machinery for producing plastics and rubber, for €925 million ($1 billion).  

The state giant also in January announced it had bought a 12 percent stake in Geneva-based energy and commodities trader Mercuria in a bid to expand its portfolio.

Last year it announced the takeover of Italian tyre maker Pirelli, renowned for its Formula One equipment and racy calendars, in a deal valued at 7.4 billion euros.

"Their acquisition strategy is not 'catching up' anymore," said Tyler Rooker, an assistant professor at the University of Nottingham.

"They're acquiring assets that add to their competitiveness as global multinationals."

Syngenta said its existing management will continue to run the company, headquartered in Basel.
   
A ten-member board of directors will be chaired by Ren Jianxin, Chairman of ChemChina, and will include four of the existing Syngenta Board members, it said.
   
Michel Demare, Chairman of Syngenta, said: "In making this offer, ChemChina is recognizing the quality and potential of Syngenta's business.
   
"This includes industry-leading R&D and manufacturing and the quality of our people worldwide," Demare said.

"The transaction minimizes operational disruption; it is focused on growth globally, specifically in China and other emerging markets, and enables long-term investment in innovation," he said.
   
"Syngenta will remain Syngenta and will continue to be headquartered in Switzerland, reflecting this country's attractiveness as a corporate location."

Syngenta last year fended off takeover bids from US-based Monsanto.

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