According to a Bloomberg report, the Chinese state-owned company approached the European firm with an offer of $42bn (£28bn). Although this was rejected because of potential regulatory issues, the companies are reportedly entering talks over a merger, with a potential agreement expected “within weeks”. Neither Sygenta nor China National Chemical Corporation were immediately available for comment.
The news sent shares in Syngenta up more than 11 per cent when markets opened. They are currently 8.3 per cent higher at CHF374.40.
It comes just three months after Syngenta turned down a similar-sized offer from US firm Monsanto, on the grounds that it “significantly undervalued the company”. Investors reacted badly to the news, however, and questioned the company's commitment to improving profits amid weakening agricultural commodities.
Syngenta is now under pressure to increase returns for shareholders, and there are reportedly additional merger suitors in the running, besides China National Chemical Corporation.
If the acquisition between the two companies goes ahead, it will be the biggest takeover ever by a Chinese company, according to sources. Syngenta is the world's biggest agrichemicals company, and owning it would help China National Chemical Corporation expand internationally.