China: ChemChina to buy Syngenta in record $43 billion deal

China made its boldest overseas takeover move when state-owned ChemChina agreed a $43 billion bid for Swiss seeds and pesticides group Syngenta on Wednesday, aiming to improve domestic food production.

The largest ever foreign purchase by a Chinese firm, announced by both companies, will accelerate a shake-up in global agrochemicals and marks a setback for U.S. firm Monsanto, which failed to buy Syngenta last year.

China, the world’s largest agricultural market, is looking to secure food supply for its population. Syngenta’s portfolio of top-tier chemicals and patent-protected seeds will represent a major upgrade of its potential output.

“Only around 10 percent of Chinese farmland is efficient. This is more than just a company buying another. This is a government attempting to address a real problem,” a source close to the deal told Reuters.

Years of intensive farming combined with overuse of chemicals has degraded land and poisoned water supplies, leaving China vulnerable to crop shortages. The deal fits into Beijing’s plans to modernize agriculture over the next five years.

“I was sent to the countryside at the age of 15, so I’m very familiar with what farmers need when they work the land. The Chinese have relied mainly on traditional ways of farming. We want to spread Syngenta’s integrated solution among smallholder farmers,” ChemChina Chairman Ren Jianxin told a media briefing.

Full content: Bloomberg

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