The takeover of the Swiss pesticides and seeds group Syngenta by ChemChina is set to go ahead as a majority of Syngenta shareholders have said yes.
As of Friday 80.7 percent had agree – above the necessary threshold of 67 percent.
That follows approval from US and European regulators for the deal under which the state-controlled chemicals group will pay the equivalent of 39 billion euros.
It has been prompted by China’s desire to use Syngenta’s chemicals and patent-protected seeds to improve its domestic agricultural output.
London Capital Group senior analyst Jasper Lawler explained: “When it comes to China, and I think this is where maybe ChemChina benefits most from the deal, is that it’s a less developed market. They have less sophisticated seeds and other products that Syngenta can bring to the bring to the table. And so it’s going to help develop China and obviously it’s a semi-state owned company, so this is a goal of China to increase their own food supplies through their agro business.”
The deal is the biggest Chinese takeover of a foreign company ever.
It is part of major consolidation in the international market for agricultural chemicals, seeds and fertilisers – Dow Chemical is trying merge with DuPont, and Bayer with Monsanto.
The trend toward market consolidation has triggered fears among farmers that a lack of competition will push up prices while the pipeline for new herbicides and pesticides might slow. Regulators have required some divestments as a condition for approving the Syngenta deal.
Nebraska Farmers Union attempts to block Syngenta–ChemChina deal https://t.co/oJISeh7TkW— Chemistry World (@ChemistryWorld) May 5, 2017