(Dow Jones) -- Government-owned China National Chemical Corp. has capped a string of acquisitions with a $43 billion cash offer to buy Swiss pesticide and seed company Syngenta AG, in the most ambitious foreign takeover attempt by a Chinese company to date.
Syngenta said on Wednesday that the agreed offer by the Chinese company -- commonly known as ChemChina -- amounted to $465 a share, plus a special dividend of 5 Swiss francs ($4.91) a share to be paid immediately before the deal's closing.
Syngenta shares jumped, rising 5% on the Zurich bourse on the news of the offer, worth 480 francs a share.
"We have a very attractive offer on the table and we are putting it to our shareholders," Syngenta's interim Chief Executive John Ramsay said in an interview with The Wall Street Journal.
The proposed deal, which requires approval from Syngenta shareholders, sends a signal that despite sharp drops in global equity markets driven by concerns over economic growth--particularly in China--companies still see opportunities for expansion through acquisitions.
The takeover would help ChemChina grow Syngenta's business in China and other emerging markets, and help to gain a foothold in the U.S. Acquiring Syngenta's intellectual property is also attractive as the Swiss company develops genetically engineered seeds that may help further open the tightly-regulated Chinese market for biotech crops.
To seal the deal, the companies now have to cross potentially high regulatory hurdles in the U.S.--about a quarter of Syngenta's sales come from North America--and elsewhere.
As well as antitrust authorities, a U.S. interagency committee known as CFIUS has the power to block deals that pose a threat to U.S. national security. Last month, Philips NV said it was terminating its $2.8 billion deal to sell its lighting-components and automotive-lighting business to Go Scale Capital, an investment fund led by Chinese venture-capital firm GSR Ventures.
ChemChina has developed a plan to respond to any challenges CFIUS might make to the deal and would be willing to make various moves to assuage those concerns, according to a person familiar with the matter. Mr. Ramsay separately played down competition concerns. There is "very little antitrust risk" for the takeover, he said.
The offer, confirmed by ChemChina, comes after months of uncertainty over the future of Syngenta, which was earlier pursued by U.S. seed giant Monsanto Co.
After Monsanto's failed, unsolicited approach to the Swiss company, ChemChina decided it would only pursue a deal with Syngenta on a friendly and agreed basis, according to the person familiar with the situation.
The management teams of ChemChina and Syngenta first met in Germany nearly a year ago, according to the person. The discussions between ChemChina and Syngenta accelerated in December. Syngenta's board gave the go-ahead for Syngenta's management to begin negotiating a deal with ChemChina in early January and the two sides proceeded with a rapid due-diligence process afterward, according to the person.
If completed, the purchase would mark a fresh high for Chinese overseas acquisitions. Chinese companies--with the strong support of their government--have sought to gain technology and know-how from abroad, while also opening up new markets to drive sales overseas as demand at home slows.
For Syngenta, the deal holds the prospect of new capital and greater access to the huge China market, while for ChemChina, it gives the company access to Syngenta's advanced biotechnology for developing seeds.
Syngenta would remain based in Switzerland while the existing management team would continue to run the company, Syngenta Chairman Michel Demaré said in a statement. Mr. Demaré is set to be replaced by ChemChina chief Ren Jianxin upon the deal's completion.
"The transaction minimizes operational disruption," Mr. Demaré was quoted as saying. "It is focused on growth globally, specifically in China and other emerging markets."
In a separate statement by ChemChina, Mr. Ren said his company was committed to working alongside existing management.
The Wall Street Journal reported Tuesday that the agreement was imminent.
The offer for Syngenta, if successful, would be the latest jewel in the crown of ChemChina's chairman, Mr. Ren, who in recent years has emerged as one of China's most ambitious global deal makers.
In March, ChemChina agreed to buy Italian tire maker Pirelli & C SpA, underscoring the Chinese company's interest in investing in Europe. More recently, ChemChina said in January it would acquire German equipment maker KraussMaffei Group as part of a consortium of investors for about $1 billion.
The agreement for Syngenta comes as China's slowing economy has shaken global equity markets and contributed to a commodities crash that has battered company valuations world-wide and spurred intense deals activity.
The global seed and pesticide sector already in particular has faced consolidation after DuPont Co. and Dow Chemical Co. announced plans to merge in December.
Syngenta said Wednesday it expected to conclude the deal with ChemChina by the end of 2016.
Dyalco, J.P. Morgan, Goldman Sachs and UBS advised Syngenta on the transaction. HSBC Holdings served as the adviser to ChemChina