ChemChina is China’s largest chemical state-owned enterprise and is active in production, R D, and marketing of its chemicals, agrochemicals, rubber, materials and life sciences, and other similar products and services in 150 countries globally. The acquisition of Syngenta will enable ChemChina to enhance its vertical integration, ensure greater food security, and improve Chinese domestic agricultural output through the use of Syngenta’s portfolio of highly advanced and patent-protected pesticides, seeds, and other agrochemicals. Increased food security and domestic production in particular have been outlined as top policy priorities by the Chinese government, and the acquisition of Syngenta aims to secure this goal.

Syngenta itself sells its products in 90 countries across the world, focused on pesticide and seed research, development, and production across eight key crops: cereals, corn, diverse field crops, rice, soybean, specialty crops, sugar cane, and vegetables. Syngenta sales revenue in 2016 amounted to $132 billion, with Syngenta pesticides and seed products accounting for 20% and 8% of their global market shares, respectively. Syngenta products will now enjoy greater market access across Asia, especially in China, and could prove a boon to sales in the region, as Asia-Pacific currently accounts for only 15% of Syngenta total sales.

To ensure the success of this partnership, certain challenges must still be overcome, such as differences in national laws, regulations, and corporate governance culture between the Beijing-based ChemChina and Syngenta, which is to retain its headquarters in Basel, Switzerland and all of its current management and operations. However, both parties remain confident in their ability to overcome any obstacles they might face in order to ensure a mutually-beneficial relationship.

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