China has made its boldest overseas takeover move yet. As Hayley Platt reports state-owned ChemChina has agreed a $43 billion bid for Swiss seeds and pesticides group Syngenta.
It clearly has a lot of fans outside its Switzerland base - last year U.S. giant Monsanto wanted Syngenta - now it's ChemChina - China's National Chemical Corporation. And this $43 billion agreed deal for the seeds and pesticides group looks more likely to be completed. ChemChina maybe paying two billion less than Monsanto offered - but there are other factors at stake, says IG's Alastair McCaig (SOUNDBITE) (English) IG, MARKET ANALYST, ALASTAIR MCCAIG, SAYING: "Syngenta is obviously heavily involved in crops and the administration of fertilisers and the likes. And when you consider that a fifth of the world's population resides inside China's borders it is no surprise that they are shifting their focus on how exactly they aim to feed those mouths in the future." The deal would be the largest ever overseas acquisition by a Chinese firm. And it's the latest example of China's quest for Western technology and distribution networks. Similar deals include last year's buyout of Italian tyre maker Pirelli. And last month's acquisition of German industrial machinery maker KOUSE MAFF-EYE KraussMaffei - ChemChina was behind both. (SOUNDBITE) (English) IG, MARKET ANALYST, ALASTAIR MCCAIG, SAYING: "We are increasingly hearing noises about how Chinese investors and the Chinese community at large are trying to diversify their portfolios outside China's borders, looking at investing in a more global community. It helps increase their tradability with the rest of the world." Syngenta's CEO John Ramsey said the deal was "appropriate and attractive" to shareholders. And he sees no regulatory hurdles. The firm's shares rose more than 6 percent on the news - but they were still trading below the agreed offer price of $465 per share.