Syngenta Aims for Further Cost Cuts as Completion of Sale Nears


 Bloomberg

(Bloomberg) -- Syngenta AG, in the process of being taken over by China National Chemical Corp. for $43 billion, is looking to broaden a $1 billion efficiency program across more areas of the Swiss maker of pesticides and seeds to protect margins against stagnant demand.

Since taking the helm of Syngenta in June, Chief Executive Officer Erik Fyrwald has been in discussions with management on how to bolster the savings plan introduced in 2014, drawing on his experience running chemical distributor Univar, he said Wednesday.

“We have had to adapt and adjust as the markets have been softer,” Mark Patrick, who Fyrwald promoted to chief financial officer, said in a phone interview alongside the CEO. “Some of the platforms we have put in place really have exceeded our expectations in terms of productivity improvements.”

While ChemChina is in the final stages of its acquisition, obtaining approvals from antitrust authorities has turned out to be the most complex of stages after two other mega-deals in the industry heightened regulators’ interest in consolidation. The end of a review in Europe has been delayed until mid-April while authorities digest a suggested remedy package, Syngenta has said.

Syngenta and ChemChina remain confident that the deal will close, Syngenta said Wednesday, adding that the transaction should be completed in the second quarter.

In what is likely to be Syngenta’s final annual earnings report as a listed company, profit per share declined 4 percent to $17.03, while revenue slipped 5 percent to $12.79 billion. Analysts in a Bloomberg survey predicted about $16.40 a share on $12.9 billion in sales.

Shares of Syngenta rose 1.2 percent to 430.50 Swiss francs at 9:45 a.m. in Zurich. While some investors had hoped for a final dividend to be paid given the delays in getting antitrust approval, Syngenta withheld a payout as planned. Fyrwald said paying one would have had negative tax consequences for some shareholders.

To contact the reporter on this story: Andrew Noël in London at anoel@bloomberg.net. To contact the editors responsible for this story: Tara Patel at tpatel2@bloomberg.net, Phil Serafino, John Bowker

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