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ChemChina poised for swift completion of Syngenta deal

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock
Now with the support of some 82% of Syngenta shareholders, ChemChina’s US$43bn bid to take over the Swiss pesticides and seeds group appears to be heading for fast completion.

The two companies announced that the percentage of share transfers accepted in China’s biggest foreign acquisition has increased since ChemChina sealed the deal two weeks ago — over the minimum acceptance rate condition of 67%.

An additional acceptance period has begun, during which shareholders who have not already tendered their stock may accept offers. The agreed offer is for US$465 per share.

According to the Financial Times​, Syngenta is confident the sale will be completed by the summer. The company’s chief executive Erik Fyrwald said he is looking to “aggressively grow​” the company in China at a time when Beijing has been encouraging greater efficiency in the agriculture segment and reduce reliance on foreign seeds.

There is a big opportunity in China. We have an opportunity to bring our capabilities to help strengthen Chinese agriculture​” using state-owned ChemChina’s domestic knowledge and funding to bring existing technologies to the market, he told the newspaper.

Fyrwald, who will remain chief executive after the transaction, also revealed that he expects European and American antitrust regulators to approve the deal in a matter of weeks.

The acquisition will be the latest in a round of consolidation of the global seeds, agricultural chemicals and fertilisers segment, after Dow Chemical was given the green light to merge with DuPont in March, while a deal between between Bayer and Monsanto is in progress.

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The guidelines cover local law enforcement of new food safety regulations which commenced in March, and list the penalties violators can expect to face.

The measures include checks on food-handling health certificates, in-transit hygiene and storage conditions.

They stipulate how cakes and similar products, seafood and fresh beverages must be delivered in thermal isolation boxes.

They also detail how cold and hot food should be kept apart, and temperature limits for individual product categories.

Food platforms have been under the microscope since a 2016 food safety report released by the Shanghai Food and Drug Administration showed that food deliveries had the lowest pass rate among all food manufacturing and operation sections.

Only 94.6% of spot tests met minimum standards within the category.

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China now accounts for some 35% of global seafood production, while the wider Asia-Pacific region will account for more than two-thirds of the world’s demand by 2030, according to a new report on the segment.

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Already one of the biggest regions for both exports and imports, Asia-Pacific is projected to account for 70% of global sales of fish and seafood products in the next 13 years, according to Research and Markets.

To meet this increasing demand, global production is expected to grow rapidly in the coming years. 

China, the world’s biggest producer, consumer, importer, and exporter of seafood, accounts for more than a third of all global production, and imports into major cities there has been consistently rising. 

From January-April 2016, Shanghai imported approximately 34,000 tons of seafood, a growth of 34.7% year-on-year. 

Demand for luxury seafood products has increased significantly in China over recent years, and in 2015 the country accounted for approximately 20% of luxury seafood consumption globally. 

Japan is China’s main export market, holding a 20% share, followed by America and Hong Kong. In Europe, Britain, Germany, the Netherlands and Spain are also major markets. 

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