Syngenta sales slip as ChemChina takeover looms
Swiss pesticide and seed giant Syngenta said Monday its sales slumped one percent in the first quarter, but said its planned takeover by ChemChina was on track for completion in May.
During the first three months of the year, Syngenta rang up sales worth $3.7 billion (3.4 billion euros) -- down one percent from the same period last year, it said in a statement, adding that volumes remained stable but that prices fell slightly.
Explaining the sales dip, the company pointed especially to a late start to the growing season in Europe due to cold weather and reduced demand for fungicides and herbicides in Latin America after Brazil and Paraguay were hit by dry weather at the end of last year.
"While conditions for growers at the start of 2017 remain difficult, our business is steady and currencies are no longer a drag on our performance," company chief Erik Fyrwald said in the statement.
Last year, Syngenta's sales were hit by a stronger dollar, but the company said Monday a "more favourable currency trend" had started in the second half of 2016 and had continued into the first quarter, with the strengthening of the Russian rubel and the Brazilian real.
In light of the more positive trend, Fyrwald said the company maintained its "targets of low single digit growth in sales" as well as improved margins for the full year 2017.
He also hailed "significant progress" in recent weeks towards ChemChina completing its $43-billion takeover of Syngenta, pointing to regulatory approvals from the EU and the United States for what should be the biggest overseas takeover ever for a Chinese firm.
"We look forward to closing the transaction in May 2017," he said.
The merger is part of a broader wave of consolidation in the agro-chemicals sector that has worried environmental activists and farmers.
European regulators last month approved the $130-billion merger of US agro-chemicals giants Dow Chemical and DuPont and are still mulling German giant Bayer's $66-billion offer for US firm Monsanto.
The closing date for the ChemChina deal has meanwhile been pushed forward seven times to await a green light from a long line of regulators, including from China, Canada, Brazil and Mexico, in addition to the United States and the EU.
With Indian authorities the only ones remaining to give their blessing to the deal, ChemChina has said its tender offer to purchase all publicly held Syngenta shares will now end on May 4.
Following Monday's announcement, Syngenta saw its share price inch up 0.69 percent to 455.20 Swiss francs in midday trading, but was outperformed by the main SMI index on the Swiss stock exchange which rose 1.54 percent.