Syngenta to use proceeds from $ 10 billion Shanghai IPO for acquisitions and growth

Syngenta Group will use proceeds from its expected $ 10 billion initial public offering (IPO) to fund organic growth and a wave of acquisitions to capture more of the $ 100 billion seed market and sprays, the agrochemicals giant said on Friday.

The company’s prospectus to list on the Shanghai Nasdaq-style STAR marketplace was released online by the Shanghai Stock Exchange on Friday, confirming details reported this week by Reuters after the request was filed on Wednesday.

“The Syngenta Group will expand and renovate its production facility and implement a strategic acquisition to meet growing market needs,” the company said in the document.

The Shanghai Stock Exchange filing showed that Syngenta’s application to list on the STAR market was successful and that the company plans to issue up to 2.79 billion shares.

Syngenta’s IPO still requires approval from the Shanghai Stock Exchange and registration with the China Securities Regulatory Commission.

The show, set to be the largest in the world this year, will value the Basel, Switzerland-based pesticide and seed maker at around $ 60 billion including debt, or $ 50 billion without, people said. sources at Reuters.

The float is expected to be larger than the $ 6.2 billion IPO of video-sharing platform Kuaishou Technology in Hong Kong. This will likely be the biggest STAR board of two years – a major boost after the 11th hour was removed from Ant Group’s blockbuster list last year due to regulatory concerns.

The filing means the IPO is expected to take place by the end of 2021, said the sources, who were not authorized to speak to the media and declined to be identified.

A secondary listing of Syngenta is also being considered which could take place within a year of its debut, with exchanges in Zurich, London and New York among options under consideration, the sources said.

The proceeds will finance acquisitions, including previously announced deals to buy Yangnong Agrochemical and Valagro, according to the filing.

The funds collected will also be used for other projects such as research into advanced agricultural technologies, expansion of production and modernization and maintenance of its facilities.

The funds will also be used to further expand its modern agricultural services platform – which trains farmers in China – and to pay off long-term debt, he said.

The Swiss seed and crop protection giant was acquired in 2017 for $ 43 billion by ChemChina, which was integrated this year into Sinochem Holdings Corp.

The acquisition remains China’s largest takeover of a foreign company and aims to use Syngenta’s leading chemicals and patent-protected seeds to dramatically improve domestic agricultural production.

Since its takeover, Syngenta has merged with Israeli agrochemical company ADAMA and Sinochem’s fertilizer and seed business.

Syngenta, the world’s largest manufacturer of crop protection products and third-largest supplier of seeds, competes with Germany’s BASF, Bayer and the US agrochemical company Corteva in the speed and spray market.

The company employs 49,000 people worldwide and generated sales of $ 23.1 billion in 2020. Its main markets are the United States and Brazil, while it is growing rapidly in China. .

Syngenta reported first quarter revenue of $ 7.1 billion, 20% higher than year-on-year, with earnings before interest, taxes, depreciation and amortization up 19% to 1.5 billion of dollars.

Net profit rose 72% in the first quarter, according to the prospectus.


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