According to media reports, September 13 is the new deadline for China National Chemical (ChemChina)’s US$43 billion (C$56 billion) acquisition offer for Swiss firm Syngenta, a deal first announced in February. Syngenta had already anticipated a 2016 closing date for the deal, which due to its American assets is currently being reviewed by the Committee on Foreign Investment in the US (CFIUS) for security risks to the United States.
Besides CFIUS, the deal’s completion requires approval from anti-monopoly authorities in Europe and elsewhere, which has led some observers to estimate that there is only a 35% chance the deal will pass both the American and other regulatory reviews. Syngenta made US$3.303 billion in sales from the United States in 2015, accounting for 25% of the company’s consolidated sales. In addition, Syngenta’s non-current (long-term) assets in the United States last year were valued at US$1.968 billion, or 26% of the company’s total non-current assets.
On the China side of the deal, the purchase’s steep price tag has led to reports that ChemChina plans to sell US$10 billion in shares, on top of a loan package and the raising of US$15 billion in cash, in order to help finance the deal. March saw ChemChina receive a US$20 billion loan for the deal, and lenders are reportedly also preparing a US$12.7 billion loan to help ChemChina’s fundraising. Last year, Syngenta rejected a nearly US$47 billion acquisition offer by Monsanto, a firm with a most recent quarterly net income of US$717 million and sales of US$4.2 billion.