Syngenta AG shares are up on Wednesday after the “mother of all” chemical mergers is reportedly being considered between Dow Chemical Co and EI Du Pont De Nemours And Co.
According to a source familiar with the matter, Syngenta could be next. China National Chemical Corp, commonly known as ChemChina, is said to be considering a purchase of Syngenta in a deal that may be announced by Friday.
The value of the deal is expected to be 44 billion Swiss francs ($44.53 billion), trumping a $42 billion buyout offer ChemChina reportedly made for Syngenta in mid-November. HSBC is one bank working on the deal, the source added.
After rejecting ChemChina’s first offer on November 12, Bloomberg reported both sides could reach an agreement “within weeks.”
Syngenta told Benzinga in an email that it “has no comments to make” on the matter, while an HSBC analyst declined to comment. ChemChina could not be immediately reached for comment.
Deal ‘Makes Sense’
Speaking to Benzinga, a sell-side analyst said a deal between ChemChina and Syngenta “makes sense to some extent,” adding that the acquirer has a “strategic desire to capture new chemical production.”
Industry expert Angie Setzer said she expects either Monsanto Company
or ChemChina to purchase Syngenta eventually. A ChemChina tie-up would have “far less hoops to jump through from an anti-trust standpoint” than Monsanto, she explained, adding that Syngenta might also prefer gaining exposure to a new customer base in China.
In August, Monsanto dropped its $46 billion cash-and-stock bid for Syngenta because the offer didn’t meet Syngenta’s standards.
ChemChina’s new offer for Syngenta is expected to be in all cash, the aforementioned source said.
The separation is expected to be completed by early Q3, following the receipt of all relevant approvals, including final Board approval. Nouryon intends to reduce its own debt with proceeds received from a planned external financing by Nobian.
Trinseo became a producer of the resin when it acquired Arkema’s PMMA business. It announced that it closed on the €1.14bn deal earlier this month.
As part of the EU’s Single-Use Plastic Directive (SUPD), it will become mandatory for caps and lids to remain attached to all beverage containers up to three liters in capacity from 2024.