Moody's Places Syngenta (SYT) Ratings on Review for Downgrade Amid ChemChina Deal

Moody's Investors Service, (Moody's) has placed Syngenta AG's (NYSE: SYT) ratings, including its A2 long term issuer rating and Prime-1 short-term rating under review for downgrade following the announcement that China National Chemical Corporation (ChemChina, unrated) has offered to acquire the company for cash of over USD43 billion.

Moody's has also placed under review for downgrade the A2 senior unsecured rating and (P)A2 MTN programme rating assigned to its guaranteed subsidiaries Syngenta Finance N.V. and Syngenta Finance AG, as well as the Prime-1 commercial paper rating of its guaranteed subsidiary Syngenta Wilmington Inc.

RATINGS RATIONALE

The review was triggered by Syngenta's announcement that ChemChina has offered to acquire the company for a cash consideration of over USD43 billion. Syngenta's board of directors has unanimously recommended the offer to shareholders. The transaction requires the acceptance of 67% of shareholders to succeed. Closing of the transaction remains subject to all the customary regulatory approvals and may take place by year-end 2016.

The review will focus on the impact of the ChemChina take-over on Syngenta's future business strategy, capital structure and financial policies. It will assess the structure and funding mix of the acquisition financing arranged by ChemChina and the potential increase in leverage of Syngenta. While Moody's notes ChemChina's commitment to maintaining the highest governance standards with a view to a future IPO of the business, the review will also consider the level of financial disclosure to be provided in the future in order to determine whether ratings can be maintained on Syngenta following the acquisition.

While it is impossible to assess the overall effect of the transaction on the credit profile of Syngenta in the absence of further information on the financing of the transaction and the current financial position of ChemChina, Moody's cautions that the review may lead to a multi-notch downgrade of the company's ratings.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Chemical Industry Rating Methodology published in December 2013. Please see the Ratings Methodologies page on www.moodys.com for a copy of this methodology.

You May Also Be Interested In

• EQT Corp. (EQT) PT Lowered to $46 at Wolfe Research
• BMO Capital Reiterates Market Perform Rating on Incyte (INCY)
• Renovaro Biosciences (RENB) to Acquire Cyclomics