Zug | Reuters — Syngenta is in talks about a possible merger and is weighing a number of options, the Swiss agrichemicals group’s chairman said Wednesday.
Michel Demare said last month that the crop chemicals and seeds company was in talks with China’s state-owned ChemChina, U.S. seeds giant Monsanto and others.
When asked about the prospect of Syngenta possibly becoming a Chinese company, Demare said: “We are at a stage where we are looking at different combinations. I’m just saying it’s one of them. Everybody has spoken to each other.”
“I have said a few months ago that I believe within six months we will see some consolidation steps… it is too early to say how all this will finish.”
ChemChina, which is being advised by HSBC, is seeking a loan package by several large Western banks to fund a possible Syngenta takeover deal, which later may be refinanced by Chinese banks, several sources familiar with the matter said.
HSBC declined to comment while an emailed request to ChemChina for comment was not immediately answered outside office hours in China.
A takeover of Syngenta by ChemChina would underpin an effort by the Chinese government to boost farming productivity, as it seeks to cut reliance on food imports amid limited farm land, a growing population and higher meat consumption.
ChemChina has a five per cent share of the global crop chemicals market through its ownership of Israeli generic pesticides maker Adama.
Having spurned unwanted suitor Monsanto last year, Syngenta is under pressure by shareholders to boost its value even as agricultural markets deteriorate.
Demare told a Swiss newspaper last month that Syngenta was in talks with Monsanto, ChemChina and other rivals because “going it alone is hardly possible”, given what shareholders were expecting for the next 12 months.
Monsanto CEO Hugh Grant said last week that recent attempts to rekindle talks with Syngenta have been difficult.
He told analysts on an earnings call that company executives still believe there is “a significant opportunity” for integration between the two companies.
— Reporting for Reuters by Joshua Franklin in Zug, Switzerland and Arno Schuetze and Ludwig Burger in Frankfurt, additional reporting by Freya Berry and Pamela Barbaglia in London.