Syngenta float to get $1bn buy-back support

Click to follow
The Independent Online

Astrazeneca and Novartis are to spend up to $1bn (£700m) supporting the shares of Syngenta, the agro-chemicals business that will be floated by the two companies in November.

Astrazeneca and Novartis are to spend up to $1bn (£700m) supporting the shares of Syngenta, the agro-chemicals business that will be floated by the two companies in November.

The complex transaction involves the pharmaceutical groups AstraZeneca, an Anglo-Swedish company, and Novartis, a Swiss company, merging their respective agro-chemicals interests and spinning off the new entity. AstraZeneca and Novartis shareholders will be allocated shares in the new company.

The deal, which was first announced in December, will create the world's biggest company producing crop protection chemicals.

The surprise announcement yesterday was the shares buyback programme, analysts said. This will be carried out by Syngenta, but funded by its parent companies. It will involve the re-purchase of up to 10 per cent of the shares of the new company, but only in the first 10 days of trading in Syngenta stock. The companies said this was to provide stability to Syngenta shares, as shareholders interested only in holding pharmaceutical companies may sell the stock.

The new group will have its primary listing in Zurich, with secondary quotes in London, Stockholm and New York. Unlike AstraZeneca, it will not be in the FTSE 100 index, as the main listing is in Switzerland, meaning that London tracker funds would also be forced to sell the stock.

Comments