Syngenta's (SYT) Discount to Offer Price Should Narrow Significantly - Deutsche Bank
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Deutsche Bank maintained a Buy rating on Syngenta (NYSE: SYT) with a price target of CHF 430. Earlier ChemChina and Syngenta announced that the companies have received clearance on their proposed transaction from CFIUS. In the view of analyst Virginie Boucher-Ferte, CIFUS clearance removes a key risk on the deal, and Syngenta's discount to the offer price should narrow significantly.
"Syngenta shares had been trading at a very large (15-20%+) discount to the offer price since the ChemChina bid on Feb 3. The main reason has been CFIUS risk which was seen as a complete “black box”. This now means that the deal is highly likely to go through as we don’t see the antitrust process as a deal breaker due to very limited overlaps (Syngenta has a 20% market share in Crop Protection globally against c5% for ChemChina through Adama). In addition Syngenta management said earlier this year that if required, ChemChina was ready to divest some of their existing Ag assets belonging to Adama). However antitrust reviews remain a lengthy process due to the number of jurisdictions involved and different markets/product categories within that so we still don't expect the deal to close before November," said Boucher-Ferte.
Shares of Syngenta closed at $79.51 yesterday.
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