With an estimated population of about 1.5 billion peoples, China is intent on providing food security for its teeming people, and it is seeking to buy up Swiss company Syngenta for $43 billion to make this a reality for its people - Reuters writes.
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The China National Chemical Corp, also known as ChemChina, made this bid on Wednesday, the largest of such to be made overseas by any Chinese group.
Syngenta is a Swiss seeds and agrochemicals group that US agro-company Monsanto failed to acquire in 2015 – the present bid to acquire Syngenta by ChemChina would have been a sweet deal for Monsanto.
With the acquisition of Syngenta, China will explore the Swiss company’s agricultural technology and expertise to grow food for its people while still accessing the company’s global market share and Western distribution networks.
A source revealed to Reuters that "Only around 10 percent of Chinese farmland is efficient. This is more than just a company buying another. This is a government attempting to address a real problem."
John Ramsay, CEO of Syngenta expressed joy at the bid which he said is “very appropriate and attractive,” adding that ChemChina has a solid financial backing and that there won’t be any problems to thwart the deal. “I think the overall regulatory approvals will not be very challenging,” he had said.
To this extent, inside sources reveal HSBC and China CITIC Bank International among other Chinese players would be funding the deal if it eventually scales through.
ChemChina Chairman, Ren Jianxin, explained that "The discussions between our two companies have been friendly, constructive and cooperative, and we are delighted that this collaboration has led to the agreement." He however added that his country is still on the search for more deals to enhance its food supply and security for its peoples.
"ChemChina has a very ambitious vision of the industry in the future. Obviously it is very interested in securing food supply for 1.5 billion people and as a result knows that only technology can get them there," Michel Demare said.
Syngenta shareholders will get paid as much as 16 Swiss francs per share by ChemChina, and this is apart from a special dividend of 5 francs on closing.