ChemChina, Syngenta offer set to commenceChemChina, Syngenta offer set to commence
Syngenta board recommends shareholders accept offer.
March 8, 2016
Syngenta announced Feb. 3 that it had agreed to a takeover bid from state-owned ChemChina valued at approximately $43 billion (U.S.). While the acquisition is subject to regulatory approvals and other conditions, CNAC Saturn (NL) B.V., a subsidiary of ChemChina, published a prospectus for the offer March 8, saying the deal would commence March 23.
The prospectus stated that the Swiss public tender offer will be open for an initial period of 40 trading days (through May 23) but may be renewed once or several times for subsequent periods of up to 40 trading days, pending satisfaction of all offer conditions, including receipt of all regulatory approvals. ChemChina also said it intends to align the offer timelines of the U.S. offer with those of the Swiss offer. The transaction is expected to conclude by the end of 2016.
The Syngenta board of directors said the proposed transaction is in the best interests of Syngenta and its stakeholders and added that the price offered by ChemChina is fair and appropriate. As such, the board recommended that Syngenta shareholders accept the offer.
If the transaction does not obtain Chinese regulatory approvals or antitrust approvals, ChemChina will pay Syngenta a reverse breakup fee equal to $3 billion. Syngenta had originally said it would pay ChemChina $1.5 billion if the deal fails to gain approval, but the prospectus showed that ChemChina has since consented to a reduction to of that amount to $848 million.
The prospectus also states that while ChemChina has secured full financing, all or parts of the existing credit facilities may be replaced with its own financial resources and by one or several third parties.
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