A woman uses her cellphone in front of a ChemChina signage in front of the company headquarters in Beijing. ChemChina has made a proposal to buy all of Syngenta, a source says.

Bloomberg
London


China National Chemical Corp raised its bid for Swiss pesticide and seeds maker Syngenta AG in a potential deal that would mark the biggest-ever purchase by a Chinese company, people with knowledge of the matter said.
ChemChina, as the state-owned company is known, offered to buy 70% of Syngenta now, with an option to acquire the remaining 30%, people with knowledge of the matter said last week. In addition to the two-step acquisition, the Chinese firm also made an alternative proposal to buy all of Syngenta, one of the people said.
Basel-based Syngenta will hold a board meeting as early as this week to discuss the proposals, the people said. While talks are advanced, no agreement has been reached and there’s no guarantee a deal will be completed. The Swiss company is also waiting to see if US peer Monsanto Co will make a counteroffer, the people said.
Speculation is mounting that Syngenta will do a deal following a merger agreement between Dow Chemical Co and DuPont Co to create a company with a market value of more than $100bn and the world’s largest agriculture business. That deal may trigger a wave of consolidation in the industry as competitors dash to reposition themselves.
“Pressure is mounting on management, with a takeover becoming more likely,” said Christian Faitz, an analyst for Kepler Cheuvreux.
The two-step proposal would allow ChemChina to work with Syngenta to integrate the two businesses before assuming complete control of the Swiss company, said the people. During the talks, ChemChina proposed a number of similarly structured deals, whereby it would acquire Syngenta in two stages. The Chinese firm has also discussed buying 100% of the Swiss company, and has sufficient financing available, one of the people said.
ChemChina offered about 470 Swiss francs a share in cash for 70% of Syngenta, one of the people said. At that price, the company would have a market value of about 43.7bn francs ($44bn). ChemChina revised the proposal after its previous cash offer of 449 francs a share was deemed too low.
Syngenta climbed 2.2% to 382.60 francs at 1:05 p.m. in Zurich. The shares have risen 20% this year.
Syngenta is also holding informal talks about a combination with Monsanto, almost four months after rebuffing the company’s $46.6bn takeover proposal, people familiar with that situation have said. Monsanto is discussing internally the merits of a new offer, as well as opportunities to acquire crop chemical assets from other companies, chief operating officer Brett Begemann told reporters last month.
Buying Syngenta would transform ChemChina into a maker of genetically modified seeds, putting it in competition with Monsanto. Lack of seed technology is a key reason that China’s corn yields are half those in the US, said Jason Miner, an analyst at Bloomberg Intelligence.
ChemChina chairman Ren Jianxin met with Syngenta in Europe this month, people familiar with the matter said yesterday, to discuss a revised proposal.
Spokesmen for Syngenta and ChemChina didn’t respond to requests for comment on the raised offer.
A combination of ChemChina and Syngenta would mean fewer assets would have to be sold to satisfy antitrust regulators than in a Monsanto-Syngenta deal, because the Chinese company only has a 5% market share, said Kepler Cheuvreux’s Faitz.