Syngenta’s Mark Lafleur said it was a coincidence that Syngenta’s trade-show booth was located next to Quali-Pro’s booth at the 2016 Golf Industry Show (GIS) in San Diego, California. Syngenta and Quali-Pro will soon be owned by the same Chinese company.
It was only days before the GIS that it was announced that China National Chemical Corp., a Chinese state-owned chemical company known as ChemChina, proposed to purchase Syngenta for $43 billion in cash. ChemChina also has a majority state in Adama Agricultural Solutions, the parent company of Control Solutions Inc., which produces Quali-Pro products.
Syngenta, based in Basel, Switzerland, is one of the specialty turf industry’s top basic manufacturers of pesticides; Quali-Pro specializes in generic pesticides.
“We are still competitors,” Lafleur, communications manager for Syngenta, said of the company’s relationship with Quali-Pro. “It’s a complete accident that they [were] located right next to us. We were told, ‘Keep doing what you are doing.'”
Jeremy Redenius, a London-based senior research analyst who covers the European chemicals industry for research and trading firm Bernstein, told U.S. News & World Report that ChemChina’s acquisition of Syngenta will be beneficial for both companies as it will help improve food security in China while giving the Swiss company the money it needs to meet its own growth targets. Lafleur echoed that sentiment.
“This is really the best-case scenario that could have happened for us,” he said. “We are still a stand-alone company. We will continue to invest in golf course superintendents.”
Stephanie Schwenke, Syngenta’s golf market manager, said there has been a lot of speculation of what Syngenta would become, considering Monsanto Co.’s failed effort to purchase Syngenta last summer and the subsequent resignation of Syngenta CEO Mike Mack, who was criticized by shareholders over the matter.
“We can all look at our future a little bit brighter with the ChemChina announcement,” Schwenke said. “It’s a very positive outlook for Syngenta. … We will continue in Greensboro, North Carolina, as our corporate office [in the U.S.]. Our people will stay in place. … We will continue to be innovative and bring new solutions, maybe even quicker than we were able to before.”
Outside of the specialty turf industry, Schwenke acknowledged the importance that food safety plays in the sale.
“It’s very positive for what this could mean for food security in China … the technical expertise that Syngenta can bring to a growing population in China,” she added.
The transaction is expected to conclude by the end of the year. Syngenta’s existing management will continue to run the company. After closing, a 10-member board of directors will be chaired by Ren Jianxin, chairman of ChemChina, and will include four of the existing Syngenta board members. ChemChina said it is committed to maintaining the highest governance standards with a view to an IPO of the business in the years to come.
“In making this offer, ChemChina is recognizing the quality and potential of Syngenta’s business,” Michel Demaré, chairman of Syngenta, said in a statement. “This includes industry-leading R&D and manufacturing and the quality of our people worldwide. The transaction minimizes operational disruption; it is focused on growth globally, specifically in China and other emerging markets, and enables long-term investment in innovation. Syngenta will remain Syngenta and will continue to be headquartered in Switzerland, reflecting this country’s attractiveness as a corporate location.”
Jianxin said in a statement, “We will continue to work alongside the management and employees of Syngenta to maintain the company’s leading competitive edge in the global agricultural technology field.”