News & Analysis

Syngenta shareholders approve $44bn ChemChina merger

With nearly 81 percent of Syngenta shares tendered and all regulatory approvals secured, the $44 billion dollar deal is on track to close in June.

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Swiss agricultural company Syngenta and China’s state-owned chemicals conglomerate ChemChina have clinched the required shareholder support to move forward with their $44 billion merger.

The firms announced in a joint statement on Friday that roughly 80.7 percent of Syngenta shares have been tendered, exceeding the 67 percent threshold that was required for the transaction to be realized.

The development marks the final major hurdle the two companies needed to overcome in order to complete the merger, following a process that has lasted more than a year in part due to delays in achieving regulatory clearance.

It also comes less than a month after a Syngenta spokesperson told Agri Investor that both companies were “confident” in closing the transaction, despite the fact that only 21.6 percent of shares had been tendered as of April 5.

With shareholder approval and the necessary regulatory approvals from the US, the EU, Mexico and other jurisdictions in place, the deal is set to close on May 18. It will be the first of three pending mega-deals in the agricultural sector to be realized, the others being Dow Chemical with DuPont and Bayer’s planned merger with Monsanto.

The Chinese company has offered $465 per share plus a special dividend of CHF 5 ($5.01; €4.68), valuing the company at $43.8 billion. That dividend will be paid to shareholders on May 16, the two companies said in the joint statement. Holders of American Depositary Shares (ADS) will receive the special dividend in mid-July.

Under the terms of the offer, Syngenta will continue to be headquartered in Basel, Switzerland with its existing management in place. Upon closing, ChemChina’s chairman Ren Jianxin will also serve as the new entity’s chairman of the 10 member-board, while Michel Demaré, currently Syngenta’s chairman, will serve as vice chairman and lead independent director.

According to Friday’s statement, Syngenta shares will be de-listed from the Swiss stock exchange and its ADSs from the New York Stock Exchange “as soon as permitted by law and applicable regulations.”