While delays in regulatory approvals have pushed back the timeline for Syngenta’s proposed US$43 billion sale to ChemChina, the head of Syngenta’s Canadian operations is looking forward to the getting the deal finalized.
Jay Bradshaw, president of Syngenta Canada, sat down with RealAg’s Shaun Haney during the Syngenta Media Summit in North Carolina last week.
Among other aspects of the deal, Bradshaw says one of the main advantages for Syngenta — versus other competitors who are joining forces — is if the deal goes through, the company will no longer have to answer to public and institutional shareholders. The Chinese state-owned company will be its only owner.
“We’re going to move to more of an environment like a private company, as opposed to a public company,” he explains in the interview below. “The benefit for us at Syngenta is you’re not exposed to the scrutiny of your institutional or publicly-traded shareholders for constant earnings every quarter, dividend payments and earnings per share. That won’t be the financial metrics that we’ll measure ourselves with going forward.”
While lower commodity prices have served as a catalyst for the current round of mergers and acquisitions among major players in the crop input business, he says rising regulatory costs are also a significant driver.
As an example, Bradshaw says 15 years ago it cost around $100 million to develop and register a new active herbicide ingredient. Today it’s estimated at $289 million, and that’s over an 11 year timeline.
“You need a phenomenal scale, not only to have the resources for $289 million to invest over 11 years, but you only have six years left on your patent,” he notes. “The stakes of being a global player in agriculture, in our sector…are higher. If you don’t have that critical mass, we’re not going to be able to compete in a global market.”
As of last week, the company says it now expects the deal to close around March of 2017, as regulators in the EU and other countries closely examine the details of the arrangement
Bradshaw says Canadian farmers should expect “business as usual” at the farm level: “Anyone you’ve interfaced with through Syngenta in Canada, going forward, absolutely no changes.”
Here’s their conversation on the proposed sale to ChemChina, what it means for producers, and Syngenta’s plans for corn and soybean expansion (both in Western Canada and through double cropping in Eastern Canada):