ChemChina Nears Deal to Buy Syngenta Stake -- 2nd Update

By Rick Carew, Shayndi Raice and Eyk Henning 

China National Chemical Corp. is nearing an offer to buy Syngenta AG that values the Swiss pesticide company at roughly $43 billion, according to people familiar with the matter.

The deal could be announced as soon as Wednesday, although it could still fall apart, the people said.

If consummated, the transaction would represent the largest foreign acquisition by a Chinese company. Terms of the deal call for a price of about 470 Swiss francs ($460.90) a share.

Shares in Syngenta rose sharply after The Wall Street Journal first reported the news.

The deal would mark the latest consolidation of the chemicals sector after DuPont Co. and Dow Chemical Co. announced their merger in December. The trend is shrinking the number of companies that dominate the global seed and pesticide business.

U.S. chemical company Monsanto Co. kicked off the current deal making wave last spring when it proposed to buy Syngenta. After unsuccessfully courting Syngenta investors and sweetening its offer to $46 billion in cash and stock, Monsanto dropped its pursuit in August. That left many of Syngenta's shareholders frustrated because of a steep decline in the Swiss firm's share price and amid a grim outlook for the sector.

Since then, Syngenta has said that it is discussing possible deals with multiple parties, a shift in its initial resistance to a takeover.

China National Chemical, known as ChemChina, has been on a spending spree in recent years, including a $1 billion deal last month to buy German equipment maker KraussMaffei Group.

For Syngenta, a deal with ChemChina, a smaller player in agricultural products, would likely face lower regulatory risks than a combination with its main Western rivals, which also include Bayer AG and BASF SE.

Many shareholders would welcome a deal with ChemChina, partly because it is expected to make an all-cash offer as opposed to Monsanto's mix of cash and shares.

"ChemChina would be the perfect solution for shareholders, especially if it was all cash. It would have much less regulatory issues than a link with Monsanto, and there would likely to be less jobs lost in Switzerland," said Martin Lehmann, a fund manager at 3V Asset Management, which holds a stake in Syngenta.

John Revill contributed to this article.

Write to Rick Carew at [e-mail], Shayndi Raice at [e-mail] and Eyk Henning at [e-mail]

(END) Dow Jones Newswires

February 02, 2016 09:45 ET (14:45 GMT)

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