HONG KONG (AP) — A Chinese state-owned chemical maker offered to buy Swiss pesticide giant Syngenta for $43 billion in what would be the biggest-ever foreign acquisition by a Chinese company.
Syngenta AG said Wednesday its board is recommending shareholders accept the offer from China National Chemical Corp., also known as ChemChina. Basel-based Syngenta said in a statement that ChemChina's cash offer is worth the equivalent of 480 francs ($482) a share, including a special 5 franc dividend for shareholders if the deal goes through.
The deal is part of a global acquisition spree by Chinese companies, which are diversifying abroad to counter a slowdown at home while also seeking foreign expertise and technology. Last month Chinese home appliance maker Haier Group bought General Electric's home appliance business while conglomerate Wanda Group acquired Hollywood movie studio Legendary Entertainment.
The Syngenta deal, if completed, would overtake CNOOC's 2012 purchase of Canadian energy company Nexen as the biggest foreign acquisition by a Chinese company, according to Dealogic data.
Beijing-based ChemChina will keep existing Syngenta management in place following the deal, which is expected to be completed by the end of the year. It said it would also consider an initial public offering of the business "in the years to come."
"We think it's a very good deal for Syngenta and all the stakeholders will benefit from this transaction," Syngenta Chairman Michael Demaré said in a video posted on the company's website.
Last month, ChemChina bought German machinery maker KraussMaffei for about $1 billion and took a 12 percent stake in Swiss energy trader Mercuria. In March it bought Italian tire manufacturer Pirelli.
The Syngenta deal is also part of a shake-up of the global agricultural and chemical industry, which is being pressured by tumbling commodity prices that are forcing farmers to spend less on seeds, pesticides and equipment. The company reported Wednesday that net income for 2015 fell 17 percent to $1.3 billion as it struggled with low crop prices, instability in emerging markets and currency fluctuations.
For China, it's an opportunity to beef up its expertise in the "ag-chem" industry as part of President Xi Jinping's plan to modernize the country's farms to keep up with demand from a rising consumer class.
"Our vision for Syngenta is all about growth," ChemChina Chairman Ren Jianxin said in a video posted online. "We see big opportunities for the company to expand its presence in emerging markets and notably in China where there is rapid modernization driven by the need to increase grain productivity and increase food quality."
Sygenta agreed to the takeover bid after spurning a $46.5 billion offer from agricultural giant Monsanto.