ChemChina snaps up Switzerland’s Syngenta in biggest foreign deal

The new company will become the world’s largest agribusiness

The Swiss seed and pesticide maker Syngenta has been snapped up for $43bn (£30bn) cash by China National Chemical Corp (ChemChina), in the biggest foreign takeover ever by a Chinese company.

The agreed cash deal – which still has to be voted on by Syngenta’s shareholders – comes after a $47bn cash and paper offer from its US rival Monsanto was rejected last year.

It means the new company will then become the world’s largest agribusiness, producing among other things patent-protected seeds –including genetically modified ones – as well as herbicides and other chemicals. China’s president, Xi Jinping, is ambitious to increase the country’s output and make it more self-sufficient, as an expanding middle class starts to eat more meat.

China is considering relaxing its ban on genetically modified crops.

ChemChina plans to retain Syngenta’s management team, including John Ramsay, its chief executive, and claims the deal will also allow the company to expand further into pesticides and gain more access to emerging markets.

The Chinese’s group chairman, Ren Jianxin, is expected to oversee the new company.

The Swiss-based business also insisted the deal does not mean it will now be controlled by the Chinese government. Its chairman, Michel Demaré, said the country’s authorities are aware that businesses should remain autonomous.

“This is absolutely not a China nationalisation,” Mr Demaré said.

“ChemChina has a fantastic track record of having not only bought companies outside of China but also having kept investing in them and developing them and keeping the culture and values in place, and I’m absolutely convinced the same will happen here.”

Syngenta has been on the radar as a takeover target for several months. Monsanto, known for its glyphosate-based Roundup weedkillers and its associated GM seeds, made a bid that was worth $47bn last year but this was rejected by the previous management.

The approach was a cash and shares deal, instead of ChemChina’s all-cash offer and Monsanto’s shares have subsequently declined.

Mr Ren said: “The discussions between our two companies have been friendly, constructive and cooperative. We look forward to… working with the management and employees of Syngenta to deliver safe and reliable solutions for the continued growth in global food demand.”

In December, the two biggest US chemical companies, Dow Chemical and DuPont, pushed through a $130bn mega-merger.