Global Markets have approved Syngenta ChemChina deal
The journey towards a new agricultural powerhouse – the company that will result from the merger between ChemChina and Syngenta – is drawing closer to completion as global markets have approved the deal. In April, China approved the deal; soon after, India followed suit; America and Europe have also given it the green light. So it looks like ChemChina’s $43 billion acquisition of the Swiss genetically modified seed company is going through. The result will be an enormous agribusiness that will share the market with a handful of similar players, themselves the results of a flurry of top-level M&A in the agriculture sector.
Syngenta’s share price is up 17% this year so far
SOURCE: Yahoo Finance
Under the new ownership, new board members will be approved at a June 26 Annual General Meeting, with independent directors tasked to protect Syngenta’s research and development budget, as well as the location of its headquarters. Erik Fyrwald, Syngenta’s CEO, says that once the dust settles over legal wrangling and business restructuring, Syngenta will remain an “ag-focused company that is a leader in crop protection products, number three in seeds worldwide and a leader in seed treatment products.” He also noted that the deal would open up new economies of scale and provide Syngenta with new opportunities.
To comply with regulators approval, the company will have to jettison some business, but there is little left to negotiate – the journey is now in its final stages. Fyrwald is confident that the new owners will let Syngenta retain its innovative approach to business, saying: “ChemChina has no interest in cutting back. We’ll lean into our pipeline.” The question then will be how this new agri-titan competes against its similarly giant peers.
Dominion holds Syngenta in its Global Trends Managed Fund.
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