Beijing-based chemical giant China National Chemical Corp. (ChemChina) has offered to purchase U.S. chemical company Syngenta for $43 billion, according to DTN\Progressive Farmer Crops Technology Editor Pam Smith (http://bit.ly/…).
Syngenta announced Wednesday its board will recommend that shareholders accept the cash offer from ChemChina, after turning down a bid from rival U.S. chemical company Monsanto in 2015. The proposed sale will still need to undergo scrutiny by shareholders and regulatory agencies, Smith reported.
The irony of the offer stems from China's ban on imports of corn and dried distillers grains containing the Agrisure Viptera (MIR 162) biotech trait in 2014. The MIR 162 trait is produced by Syngenta.
The lengthy trade disruptions began in mid-December 2013 when China began rejecting shipments of U.S. DDG because of the presence of MIR 162, which it had not yet approved. Prices of DDG began to plummet, but fell even more in June when China announced it would stop issuing permits for imports of DDGS. In July, China demanded that any DDGS arriving in Chinese ports be accompanied by an official letter of certification that it contains no trace of MIR 162. The U.S. did not comply as no such certification exists.
Rumors that China had approved the trait began in early December 2014, then Syngenta released a statement on Dec. 22 that it had received the safety certificate for its MIR 162 trait from Chinese authorities, formally granting approval for imports of corn and DDG with the trait.
The rumors and subsequent approval of the trait led to a sharp rally in DDG prices in late December and into January 2015, and the value of DDG relative to corn rose to as much as 135%. The DTN weekly DDG spot price average increased nearly $76 per ton in the 11 weeks leading up to the first week in January 2015.
Cheryl Anderson can be reached at Cheryl.firstname.lastname@example.org.
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