Syngenta Stock Up On $43 Bln Offer From ChemChina, FY15 Results Down

(RTTNews) - Shares of Syngenta AG (SYT) were gaining around 7 percent in the morning trading in Switzerland after the crop chemicals firm said Wednesday that ChemChina has offered to acquire the company at a value of over $43 billion in cash. Separately, the company reported weak profit and sales for its fiscal 2015 reflecting poor performance in all regions, except North America. The company also announced an unchanged dividend for the year.

Regarding the offer, Syngenta stated that ChemChina has offered $465 per ordinary share plus a special dividend of 5 Swiss francs to be paid conditional upon and prior to closing. The offer is equivalent to 480 francs per share. Syngenta shareholders will in addition receive the proposed ordinary dividend of 11 francs in May 2016.

Syngenta's Board of Directors unanimously recommends the offer to its shareholders as it considers that the proposed transaction respects their interests. ChemChina will commence a Swiss and U.S. tender offer in the coming weeks and the transaction is expected to conclude by the end of the year.

Following the deal closure, Syngenta will continue to be headquartered in Switzerland, and its existing management will continue to run the company.

ChemChina has a view to an IPO of the business in the years to come, the company noted. The transaction will enable further expansion of Syngenta's presence in emerging markets and notably in China.

In the deal, Dyalco, J.P. Morgan, Goldman Sachs and UBS served as financial advisors to Syngenta.

In its fiscal 2015, Syngenta's net income attributable to shareholders decreased 17 percent to $1.339 billion from $1.619 billion in the previous year. Earnings per share were $14.52, compared to $17.60 last year. Excluding restructuring and impairment, earnings per share were $17.78, compared to $19.42 in the prior year.

Earnings before interest, tax, depreciation an amortization or EBITDA, a key earnings metric, was $2.777 billion, down 5 percent from the prior year. But, it rose 16 percent at constant exchange rates.

Annual sales declined 11 percent to $13.41 billion from last year's $15.13 billion, due to US dollar strength, while it was up one percent at constant exchange rates.

In the fourth quarter, sales declined 13 percent on a reported basis and 6 percent at constant rates to $3.16 billion. Total integrated sales fell 14 percent to $2.97 billion with weak results in all regions, despite 25 percent rise in North America. Total crop protection sales declined 23 percent in the quarter.

Further, the company said its Board of Directors will propose to pay a dividend of 11 Swiss francs per share, unchanged from last year.

John Ramsay, chief executive officer, said, "In 2016 our focus will be on further improving profitability in challenging market conditions. Progress will be underpinned by additional cost savings under the AOL program and by a reduction in raw material costs."

Syngenta shares were trading at 419.20 francs, up 6.86 percent.