China National Chemical Corp. has secured a US$ 50 billion line of credit from a group of banks to buy the Swiss agrochemicals company Syngenta AG, Caixin Online quoted a person close to the deal as saying.
ChemChina announced last week it had reached a deal to buy the Swiss pesticide and seed company for $ 43 billion in a move industry experst said would help China shore up its food security.
The line of credit, which involves both domestic and foreign banks, is necessary because the Swiss government requires the deal to be completed in cash, Caixin quoted a source close to the transaction as saying.
ChemChina’s president, Ren Jianxin, will take over as chairman of Syngenta, said the Chinese giant, adding it won’t make changes to Syngenta’s daily operations and management.
Syngenta will be independently run from its current headquarters in the Swiss city of Basilea, ChemChina said, and Syngenta’s chairman, Michel Demare, will serve as deputy chairman and independent director.
The acquisition is subject to anti-trust reviews by authorities in countries where both companies have operations, including the Committee on Foreign Investment in the United States (CFIUS).
Syngenta’s CEO, Davor Pisk, said in an earlier interview with Caixin, that the prospects of an anti-trust review were important in choosing a buyers, and the company picked ChemChina is because there was little overlap in their markets.
The Swiss firm had earlier Syngenta turned down an offer from the U.S. seed company Monsanto Company.