Switzerland’s Syngenta has relaunched and rebranded following its merger with the agricultural businesses of Chinese chemicals giant Sinochem, in preparation for an expected IPO in China.
The new entity, named Syngenta Group, also incorporates Israeli crop protection company Adama. Chinese state-owned enterprise (SOE) ChemChina owns both Adama and Syngenta, and is reportedly undergoing a merger with fellow SOE Sinochem.
Syngenta Group will comprise four business units: Syngenta Crop Protection, based in the group’s Basel headquarters; Syngenta Seeds, based out of Chicago; Adama in Tel Aviv-Yafo; and Syngenta Group China in Shanghai.
Between them, they employ 48,000 employees across more than 100 countries, and clocked up $23 billion in sales last year. Of the four units, Syngenta Crop Protection is by far the largest, accounting for $10.5 billion in 2019 sales. The China unit — consisting of the legacy Sinochem businesses — is the second largest, with $5.64 billion in sales last year.
Erik Fyrwald, the existing Syngenta CEO, will step up to become CEO of Syngenta Group; while Adama CEO Chen Lichtenstein will become the new entity’s chief financial officer.
Syngenta agreed to a $43 billion takeover by ChemChina — to date, the largest Chinese purchase of a foreign company — in Febraury 2016. The deal faced multiple regulatory hurdles before completing in May 2017, after being cleared by competition watchdogs in the US, EU, and Australia, among others.
In the same month, ChemChina reportedly entered discussions with major agrochemicals player Sinochem with a view to a potential merger worth an estimated $120 billion.
While those negotiations continue, the two Chinese giants reached agreement earlier this year to combine their respective agriculture-related businesses, including Syngenta and Adama. The creation of Syngenta Group, and its acquisition of the Sinochem businesses, brings that plan to fruition.
Regulatory documents indicate that ChemChina plans to take Syngenta Group to an IPO in China at some point this year, allowing the two SOEs to reduce their debt and clear a pathway to completing their merger.
Syngenta previously floated on the New York Stock Exchange and the Swiss Exchange. Its shares were delisted from both in early 2018.
Syngenta is among the most active corporate acquirers in agrifoodtech. In 2019, it acquired Ukrainian digital crop monitoring startup Cropio for an undisclosed amount. In a similar vein, it earlier acquired farm management software providers including Strider in Brazil, and FarmShots and AgConnections in the US. It directly invested in Indian farmer-to-business platform Farmlink, while its VC arm Syngenta Ventures has backed dozens of startups – including, most recently, Israeli precision weedsprayer Greeneye.
That investment activity seems unlikely to slow down following the restructure. Speaking to AFN last year, Fyrwald said that Syngenta’s takeover by ChemChina “gives us the freedom for increased investment in world-class R&D around seeds and crop protection.”
Got a news tip? Email me at [email protected]
