ChemChina Completes Acquisition of Syngenta

Syngenta

ChemChina or the China National Chemical Corporation – a Chinese state-owned chemical company has recently announced that it has completed the acquisition of Syngenta AG, which is a leading agribusiness based in Switzerland and specializes in agrochemicals and seeds production. This mega deal only goes on to suggest about the growing dominance of Chinese players in the global agro market. Reportedly, Syngenta’s acquisition will allow ChemChina a greater penetration in emerging markets such as Africa and India that present massive growth opportunities. Syngenta was formed in the year 2000 by the merger of Zeneca Agrochemicals and Novartis Agribusiness. Currently, it ranks among the largest crop chemical producers in the world and accounts for a considerable percentage of the global seeds and biotechnology sales, which evidently explains ChemChina’s move.

Reportedly, it is one of the biggest overseas acquisition by any Chinese company that will see a transaction of a staggering $43 billion. Incidentally, ChemChina also controls Adama, which is the largest supplier of generic crop protection products in the European region. However, the deal is believed to play a major role in further propelling a bigger wave of consolidation in the agro-chemicals sector, which has been a major concern for farmers and environmental activists.

Ren Jianxin who is the current Chairman of ChemChina has been unanimously elected for holding the same position in Syngenta. The company aims to double the size of Syngenta over the next couple of years. In February 2016, ChemChina revealed its plane to takeover Syngenta, by April, it got the clearance from European and the U.S regulators. As per an online source, Syngenta recorded sales of over $12 billion in 2016 and is further concentrating on increasing sales of its seeds and agricultural chemicals in emerging markets. The company believes that Syngenta can play a crucial role in bolstering the agro industry in developing countries with its immense technological capabilities in the particular field. ChemChina is also lining up additional acquisitions, mainly focused on seed business. Meanwhile, Syngenta will remain headquartered in Basel with Erik Fyrwald retaining the post of CEO. The agrochemical and seed industry is likely to be dominated by three prominent players that include ChemChina, Germany’s Bayer that is reportedly nearing a deal with Monsanto and the new company, supposedly to be formed by the merger of DuPont and Dow Chemical. At the same time, China has also hinted on restraining the overseas buying spree by its firms contrary to its previous philosophy that encouraged such ventures, primarily owing to rising concerns over bad loans and capital flight.

About Shambhu Nath Jha 27 Articles
Shambhu Nath Jha with an experience nearing a decade, has helped over 50 large and medium to small business enterprise to foray into new markets, increase footprint in the existing bucket and understand the nature of the beast. These beasts are the companies that have been primarily engaged in chemicals, material or packaging activities, and encountering challenge either in maintain P&L or staying ahead of their competitors. He has authored over 300 industry research papers consisting critical information such as market growth, total addressable market, serviceable addressable market, market size, forecast, player strategies, market share estimates and winning imperatives along with recommendations. He is also the pioneer of “three slope distributor/off-taker evaluation model” used by several multinational companies to track the performance of channel partners. A consultant by profession, writer by mood and explorer by desire, Shambhu Nath is currently employed with a London based market research and consulting firm as a full time consultant. A few of the industry verticals where he demonstrated his skill includes water and wastewater treatment chemicals, high purity alumina, water purifiers, activated carbon, chloramine filters, bio-based bioplastics, water purifiers, textile chemicals etc.