Agrochemical hype fails to impress City
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.A BLAZE of hype around the creation of the world's first dedicated agrochemicals company, with a likely value of pounds 10bn, failed to convince the City that the plan would transform the fortunes of its founder drugs companies, AstraZeneca and Novartis.
Syngenta, which will combine both companies' crop protection assets and seeds activities, is to be headed by Michael Pragnell, the present head of AstraZeneca's agribusiness. "The industry has long lived under the shadow of chemicals, and latterly pharmaceuticals, but we will set our own standards which will become benchmarks," Mr Pragnell said.
The move, a response to troubled global agricultural markets, did not please the market, which forced AstraZeneca's shares down 118p to 2,727p. Analysts cited concerns that the deal may meet regulatory hurdles because of Syngenta's strong position in fungicides and scepticism that the merger's $525m (pounds 328m) cost savings, which include 3,000 job losses, are achievable. The total cost of the link is $950m. Novartis shares gained slightly, rising $13/8 to $431/8 in New York.
The joint group will be the world leader in crop protection and number three in seeds. Genetically modified organisms account for only 2 per cent of Syngenta's $7.9bn pro-forma sales. Mr Pragnell said the group would be technology driven.
Syngenta will be 39 per cent owned by AstraZeneca, with the rest owned by Novartis shareholders. The companies intend to float the business on the London, Zurich, New York and Stockholm exchanges.
There was speculation yesterday that AstraZeneca, which faces a patent expiry in its lead product, Losec, in 2001, will now be an easier takeover target.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments