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© Reuters. File photo: On January 30, 2020, a logo was seen at the headquarters of the agrochemical manufacturer Syngenta in Basel, Switzerland. REUTERS/Arnd Wiegmann
Authors: Meige Shen and John Revell
Hong Kong/Zurich (Reuters)-Syngenta Group will use its expected US$10 billion initial public offering (IPO) proceeds to fund internal growth and acquisition frenzy to seize the US$100 billion seed and spray market. The agrochemical giant said on Friday.
The Shanghai Stock Exchange published a prospectus for the company’s listing on the Shanghai Nasdaq Sci-tech Innovation Board on Friday, confirming the details reported by Reuters this week after the application was filed on Wednesday.
“Syngenta Group will expand and refurbish its production facilities and implement strategic acquisitions to meet growing market demand,” the company said in the document.
The Shanghai Stock Exchange filing shows that Syngenta’s application for listing on the Science and Technology Innovation Board has been accepted, and the company plans to issue a maximum of 2.79 billion shares.
Syngenta’s initial public offering still needs to be approved by the Shanghai Stock Exchange and registered with the China Securities Regulatory Commission.
Sources told Reuters that the listing will be the world’s largest listing this year. The Basel-based pesticide and seed manufacturer is valued at approximately US$60 billion, including debt, or US$50 billion, excluding debt. .
The circulation is expected to exceed the US$6.2 billion Hong Kong IPO of the video sharing platform Kuaishou Technology. This may be the largest of the two-year-old STAR board of directors. It was a major boost last year after Ant Group cancelled its listing due to regulatory issues in the 11th hour.
The source said that the document means that the listing may take place before the end of 2021, and they have no right to talk to the media and declined to be named.
People familiar with the matter said that Syngenta’s secondary listing is also under consideration, which may be carried out less than a year after its debut, and the exchanges in Zurich, London and New York are under review.
The document stated that the proceeds will fund acquisitions, including the announced acquisitions of Yangnong Agrochemicals and Valagro.
The cash raised will also be used for other projects, such as advanced agricultural technology research, expansion of production, and upgrading and maintenance of its facilities.
It said the funds will also be used to further expand its modern agricultural service platform-training Chinese farmers-and repay long-term debt.
The Swiss seed and crop protection giant was acquired by China National Chemical Corporation for US$43 billion in 2017 and merged into Sinochem Holdings this year.
This acquisition is still China’s largest acquisition of a foreign company, and aims to use Syngenta’s top chemicals and patent-protected seeds to significantly increase domestic agricultural production.
Since its acquisition, Syngenta has merged with the fertilizer and seed businesses of Israeli agrochemical companies Adama and Sinochem.
Syngenta is the world’s number one crop protection manufacturer and the third largest seed supplier, competing with Germany’s BASF, Bayer (OTC:) and American agrochemical companies Cortiva (New York Stock Exchange:) In the speed and spray market.
The company has 49,000 employees worldwide and has sales of 23.1 billion U.S. dollars in 2020. Its largest markets are the United States and Brazil, while China is growing rapidly.
Syngenta reported sales of 7.1 billion US dollars in the first quarter, an increase of 20% year-on-year, and earnings before interest, tax, depreciation and amortization increased 19% to 1.5 billion US dollars.
The prospectus stated that net profit increased by 72% in the first quarter.
($1 = 6.4705 renminbi)
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