(Bloomberg) -- Syngenta AG, which has agreed to be taken over by China National Chemical Corp. for $43 billion, said talks with regulatory authorities to win approval for the deal have been constructive and the Swiss company is confident the transaction can be closed on time.
Talks with all regulatory authorities are ongoing and the goal remains to complete the deal by year end, the Basel-based company said in a statement on Friday. Syngenta reported earnings before interest, taxes, depreciation and amortization of $1.77 billion, lower than an average predicted profit of $1.91 billion by analysts surveyed by Bloomberg.
Chief Executive Officer Erik Fyrwald is seven weeks into the role with the dual task of steering Syngenta through its takeover by the state-owned company and streamlining a cost base to adapt to increased competition. Its Chinese parent to-be will provide a buffer at a time of weak grain prices, a lack of credit among farmers in Latin America, and a relatively benign year for pests.
ChemChina is seeking regulatory approval for the purchase that will make it the world’s largest supplier of pesticides and other crop-care chemicals, albeit temporarily. Dow Chemical Co.’s merger with DuPont Co. and Bayer AG’s possible purchase of Monsanto Co. will reorder the top rankings as the top six suppliers jostle for market share and financial power to drive research and new product releases.
For Syngenta, investors are focused on the process of winning approval from the Committee on Foreign Investment in the U.S. in a presidential election year. CFIUS can recommend a deal be blocked for reasons of national security, and this time around the panel includes the U.S. Department of Agriculture as the planned acquisition involves food security. ChemChina, which is periodically extending its offer until regulatory approval is obtained, wants to complete the deal by the end of the year.
As well as to help oversee the ChemChina deal, Fyrwald is pushing ahead with a $1 billion efficiency drive.
Fyrwald spent 27 years at DuPont, becoming head of the agriculture and nutrition unit in 2003, before joining chemical distribution company Univar four years ago. The new CEO also knows ChemChina well as the state-owned Chinese company attempted to buy Univar while he was heading that business.
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