Syngenta Deal Progresses

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By Pamela Smith
DTN/The Progressive Farmer Crops Technology Editor

DECATUR, Ill. (DTN) -- Syngenta shareholders have officially been made an offer to sell their shares to China National Chemical Corporation (ChemChina).

Tuesday at the Annual General Meeting of Syngenta AG in Basel, the 1,337 shareholders representing 50.68% of the total shares approved motions for an ordinary dividend of CHF 11.00 per share ($465 U.S. per share) and a special dividend of CHF 5.00 per share. The special dividend is contingent upon the public tender offer related to the ChemChina proposal. While shareholders voted on the proposed special dividend Tuesday, they did not vote on the transaction itself.

Paul Minehart, Syngenta North America head of communications, told DTN the offer will remain open until all regulatory approvals are completed globally. "Sixty-seven percent of shares must agree to be purchased for the deal to be completed. We believe we are on track in this process and expect to complete the deal by the end of the year," said Minehart.

On Feb. 3, 2016, Syngenta announced that ChemChina had offered to acquire 100% of the outstanding share capital of Syngenta at a price of $465 U.S. per ordinary share plus a special dividend of 5 Swiss francs to be paid conditional upon, and prior to, closing. The intended offer values Syngenta's total outstanding share capital at around $43 billion.

Syngenta, based in Switzerland, generates about one-quarter of its sales in North America, where it is a top pesticide seller and supplies an estimated 10% of U.S. soybean seeds and 6% for corn.

A Syngenta news release Tuesday morning included a comment from Syngenta Chairman Michel Demare. "I firmly believe that this is a transaction truly in the interests of all stakeholders," he said. "First of all, Syngenta will remain Syngenta. We will continue to be headquartered in Basel and be a science-based company focused on innovation."

Demare indicated that ChemChina offers the company the financial stability required for a company with a long-term vision. "The price of $465 per share plus a special dividend of 5 Swiss francs reflects not just past performance, but also some of the future potential of the company and is thus full and fair," Demare said in his speech. "The Board recommends that you tender your shares in the offer, which opened on March 23, 2016."

There has been U.S. opposition to the acquisition. Sen. Charles Grassley, R-Iowa, has publically worried about food security and safety implications from the sale and has said a bipartisan group of senators would seek a formal role for the U.S. Department of Agriculture as the Committee on Foreign Investment (CFIUS) carries out a national security review of the proposed deal.

ChemChina and Syngenta voluntarily initiated the CFIUS review upon announcement of their deal. The formal review process typically takes 75 days. The companies have said they expect to close the deal by the end of 2016.

More speculation has put Syngenta with possible unfair advantage in the biotech arena should the sale be sanctioned. China and Syngenta have tangled in the past over traits. Syngenta moved both Agrisure Viptera and Agrisure Duracade into the market without import approvals from China. The upheaval in trade that resulted because of Viptera (MIR 162) is still being played out in courtrooms.

Pamela Smith can be reached at Pamela.smith@dtn.com

Follow her on Twitter @PamSmithDTN

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