Sector News

Syngenta slumps after EU watchdog sparks ChemChina deal doubts

October 24, 2016
Chemical Value Chain

Syngenta shares fell more than 9 percent on Monday after the European Commission triggered doubts about Chinese state-owned chemical company ChemChina’s $43 billion bid for the Swiss pesticides and seeds group.

The companies met with the EU antitrust authority a week ago in a bid to allay competition concerns about China’s largest-ever foreign investment. They had until Oct. 21 to do so.

Commission spokesman Ricardo Cardoso said in an email that the companies had not offered any concessions.

This means either the Commission will clear the deal unconditionally by an Oct. 28 deadline or open a full investigation, a process that can take up to five months.

Asked about the matter, a Syngenta spokesman said the company remained confident the deal would conclude by year’s end. The spokesman later clarified this statement, saying he was simply repeating Syngenta’s previous public comment made on July 22.

Syngenta said it would provide an update on the progress of the deal with its third-quarter trading statement on Tuesday.

Its Swiss-listed shares closed down 5.8 percent at 397.50 Swiss francs, off a session low at 383.50 and below ChemChina’s agreed cash offer of $465 per share, which is worth around 462 Swiss francs at current exchange rates, plus a special dividend of 5 Swiss francs.

Meanwhile, the Australian Competition and Consumer Commission (ACCC) said on its website that its decision date of Oct. 27 was “delayed at the request of the merger parties so that they can provide more information to the ACCC. A new proposed decision date will be published in due course.”

Analysts at Baader Helvea said they viewed the share price fall as “harsh but understandable”, but nevertheless expected the deal to be closed by the first half of next year.

“We think the (Commission) is playing political poker to secure for the EU important points (i.e. GMO-related topics, trade topics, etc.) and therefore the EC tries to increase pressure on ChemChina/China to come up with interesting offers,” they said in a note to investors.

While Syngenta’s forecast that it would close this year seemed “ambitious”, they did not see the deal as being at risk.

“If the worst-worst scenario takes place and the deal fails, we think BASF again would be interested,” they added, although any offer from the German group might be below ChemChina’s deal.

By Foo Yun Chee and Oliver Hirt

Source: Reuters

comments closed

Related News

February 4, 2023

Eastman acquires performance films company Ai-Red Technology

Chemical Value Chain

Eastman Chemical Co. (Kingsport, Tenn.) announced it has acquired Ai-Red Technology (Dalian) Co., Ltd., a manufacturer and supplier of paint protection and window film for auto and architectural markets in the Asia Pacific region.

February 4, 2023

BASF and StePac partner on chemical recycling MAP packs to fight food waste

Chemical Value Chain

BASF and Israeli packager StePac have joined forces to create the “next generation” of fresh produce packaging. BASF will provide StePac with greater flexibility to advance contact-sensitive packaging formats to a higher sustainability standard by supplying StePac with Ultramid Ccycled – a chemically recycled polyamide 6.

February 4, 2023

TotalEnergies and Intraplás partner on food-grade renewable biopolymer production

Chemical Value Chain

TotalEnergies’ biorefinery in La Mède, France, allows direct access to renewable feedstock for its drop-in RE:newable polymer range derived from bio-based products. The company claims these polymers retain virgin-like properties.

How can we help you?

We're easy to reach