(Bloomberg) -- Syngenta AG, in the process of being acquired by a state-owned Chinese company for $43 billion, reported its fifth straight quarterly decline in sales, weighed down by currency moves and weakened demand for agrochemicals in Latin America.
Revenue fell 7 percent to $3.74 billion in the three months through March, the Basel, Switzerland-based company said in a statement on Wednesday. Analysts had predicted $3.72 billion. Suppliers of agrochemicals and seeds are now at the midpoint of the critical northern hemisphere’s farming season, and waiting for stronger indications of a pick up in some markets and improved pricing for crops such as soybeans.
ChemChina’s agreed deal to buy Syngenta, along with Dow Chemical Co.’s planned merger with longstanding rival DuPont Co., has sparked a rethink among other agrochemical and seed suppliers on their market weaknesses. After failing in an earlier attempt to buy Syngenta, seedmaker Monsanto Co. said April 6 that its strategy is still to add a portfolio of chemicals so it has an integrated offering for farmers, from seeds to pesticides.
While ChemChina successfully wooed its target, there’s lingering tension over whether the deal will get approved by U.S. regulators. Syngenta shares have languished at an average $408 mark this year, short of the bid price, amid a risk that regulators could take a dim view of the purchase. They closed at 405 francs ($421) yesterday.
The transaction may attract the attention of the Committee on Foreign Investment in the U.S., and some lawmakers are wary of the combination because of its potential impact on U.S. farmers’ access to genetically modified seeds. Some senators are calling on the Treasury Department to include agriculture sector regulators as part of its review of the deal.
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