Syngenta says ChemChina deal to stretch into next year
ZURICH: Syngenta, the world’s largest pesticides maker, has moved to reassure investors that the planned US$43 bil takeover by ChemChina will go ahead even though it will miss the original forecast for the deal to close this year.
“In a context of industry consolidation, regulators in the EU and elsewhere have recently requested a large amount of additional information and we now expect the regulatory process to extend into the first quarter of 2017,” chief executive Erik Fyrwald said in a statement.
“ChemChina and Syngenta remain fully committed to the transaction and are confident of its closure.”
Shares in Basel-based Syngenta fell as much as 9% on Monday after the European Commission triggered doubts about stateowned Chinese chemical company ChemChina’s bid for the Swiss group.
Fyrwald told Reuters that a swamped Commission had not had a chance to provide substantive feedback and he expected the anti-trust watchdog to take its regulatory review to a second phase once the Oct 28 deadline for fast-track approval passes.
“I think it is likely and we are expecting it, but it is not certain,” he said in a telephone interview, emphasising that he expects the deal to close around the end of the first quarter of next year.
He dismissed suggestions that the deal could be complicated by a merger of ChemChina and Chinese peer Sinochem.
“We talk to ChemChina regularly on a range of issues, as you can imagine, and they have repeatedly assured us that they are not in any discussions about merging with Sinochem,” he said.
Syngenta reported third-quarter sales of US$2.5bil, down 3% year-on-year at constant exchange rates. The average forecast from analysts polled by Reuters was for sales to ease 0.5% to US$2.6 bil.
Finance chief Mark Patrick said the company expected an “extremely challenging market” in 2017, given current crop prices, but that margins should still imprpove.
Shares in Syngenta were seen 0.1% higher in pre-market indications by bank Julius Baer. — Reuters