* Deal was previously expected to close in Q1
* Approval still outstanding in U.S., EU, China, others
* Syngenta says confident deal will go through
* 2016 EBITDA slightly better than expected, no dividend
(Add shares, analyst comments)
By Ludwig Burger and Michael Shields
FRANKFURT/ZURICH, Feb 8 Swiss pesticides and
seeds group Syngenta pushed back the expected closure
of its agreed $43 billion takeover by ChemChina to
the second quarter of 2017, but said it was making progress in
winning regulatory approval for the deal.
The transaction is important for China, the world's largest
agricultural market, which is looking to Syngenta's portfolio of
chemicals and patent-protected seeds to help bolster food
supplies for its huge population.
"ChemChina and Syngenta have made significant progress
towards achieving the necessary regulatory approvals and closing
the transaction," Syngenta said on Wednesday, as it reported
slightly better than expected core earnings for 2016 that
signalled the year-long takeover saga has not affected business.
The company said it did not plan to pay a dividend on 2016
earnings. Analysts had expected a payout of 11.60 Swiss francs a
share, up from 11.00 francs last year, but any such payout would
have been offset by a deduction from the offer price anyway,
according to the public tender offer.
Syngenta shares rose 1.2 percent to 430.30 Swiss francs
($430.82) in early trade, but are still below ChemChina's offer
of $465 per share plus a special dividend of 5 francs.
"We still see very high odds (90 percent) of the deal's
successful closure," Bernstein Research analyst Jeremy Redenius
said in a note.
Potential antitrust hurdles have gripped investors'
attention as two other major tie-ups in the pesticides and seeds
industry are being scrutinized by regulators across the globe:
Bayer's acquisition of Monsanto and the
merger of Dow Chemical and DuPont.
Agrochemicals firms are racing to consolidate amid pressure
on farm incomes and improvements in technology that are linking
pesticides and seeds more closely together.
The target closure date for Syngenta's takeover was last
year postponed to the first quarter of 2017, but EU antitrust
regulators in January extended the deadline for their decision
to April 12.
Approvals from 13 regulatory authorities have been won but
the go-ahead from Brazil, Canada, China, the European Union,
India, Mexico and the United States is still outstanding.
"ChemChina and Syngenta remain fully committed to the
transaction and are confident of its closure," Syngenta said.
Chief Executive Erik Fyrwald told Reuters he was confident
the deal would win approval from China's MOFCOM regulator
without causing any delay. The deal was making good progress
with U.S. and EU regulators as well, he said.
ChemChina is set to secure conditional EU antitrust approval
for its bid, the largest foreign acquisition by a Chinese
company, two people familiar with the matter told Reuters last
Bridge financing to close the deal was in place and
irrevocable, finance chief Mark Patrick said, while the partners
were working on the structure of longer-term financing.
Syngenta said it planned to push its annual meeting to June,
given it was close to completing the deal.
It reported 2016 earnings before interest, tax, depreciation
and amortisation (EBITDA) of $2.66 billion on sales of $12.79
billion. Analysts in a Reuters poll had on average expected
EBITDA of $2.61 billion on sales of $12.85 billion.
UBS analysts said EBITDA in the second half was solid,
"which bodes well for (agriculture) peers BASF and Bayer as well
as suppliers such as Lanxess and Croda."
For 2017, Syngenta said it was targeting low single-digit
percentage growth in sales at constant exchange rates, an
improvement in the EBITDA margin and strong free cash flow.
(1 Swiss franc = $1.0004)
($1 = 0.9988 Swiss francs)
(Reporting by Ludwig Burger and Michael Shields; Editing by
Joshua Franklin and Mark Potter)