by Staff Writers
Zurich (AFP) Feb 8, 2017
Swiss pesticide and seed giant Syngenta said Wednesday that restructuring costs hit 2016 earnings, even as its planned takeover by ChemChina looks set to be completed by the middle of the year.
Last year, Syngenta raked in a net profit of $1.2 billion (1.1 billion euros), which was 12 percent lower than a year earlier, blaming ballooning restructuring and impairment charges, including costs linked to the pending ChemChina deal.
Syngenta's 2016 sales were meanwhile hit by low crop prices and a stronger dollar, slipping five percent year-on-year to $12.8 billion, it said.
The net profit and sales numbers were largely in line with the expectations of analysts polled by Swiss financial news agency AWP.
"In 2016, Syngenta showed a resilient performance in the face of another difficult year for the agriculture industry," company chief executive Erik Fyrwald said in the earnings statement.
China's state-owned chemical corporation ChemChina is awaiting final regulatory approval for its planned purchase of the Swiss company for $43 billion, and completing what should be the biggest overseas takeover ever for a Chinese firm.
"ChemChina and Syngenta have made significant progress towards achieving the necessary regulatory approvals and closing the transaction," Syngenta said.
It said the deal so far had received the approval of 13 regulatory authorities, but was still waiting for a green light from Brazil, Canada, China, the EU, India, Mexico and the United States.
The deal, it said, was expected to close during the second quarter.
"ChemChina and Syngenta remain fully committed to the transaction and are confident of its closure," the statement said.
The expected closing date has been pushed back several times as regulators in the United States and other countries have dragged their feet.
The deal is just one of several huge takeovers in the agro-chemical sector that regulators are grappling with, with German giant Bayer offering $66 billion for US firm Monsanto, which in 2015 had tried to acquire Syngenta for $46 billion.
US giants Dow Chemicals and DuPont have also proposed a $130-billion tie-up.
Syngenta's board has decided to host the general assembly in June, after the final settlement of the ChemChina is expected to go through, and said it did not plan to pay out dividends this year.
However, once the ChemChina deal goes through, a special dividend of 5.00 Swiss francs ($5.01, 4.70 euros) per share will be paid out, it said.
Following the news, Syngenta saw its share price rise 1.18 percent to 430.40 Swiss francs a piece in morning trading as the Swiss stock exchange's main SMI index remained largely flat.
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