Syngenta Group, the Chinese-owned seed giant, is set to move forward with its initial public offering (IPO) plans in Shanghai after withdrawing its application for the Nasdaq-like Star board. The decision comes less than two months after the Shanghai stock exchange abruptly canceled the firm's hearing to join the Star board. Syngenta will now immediately apply for a listing on the main board in Shanghai.
The switch was prompted by China's expansion of a registration-based system for listings on all exchanges beyond the Star board earlier this year. This change aimed to accelerate access to funding within China's $10.5 trillion equity market.
Sinochem Holdings Corp., Syngenta Group's parent company and subsidiary of state-owned China National Chemical Corp., or ChemChina, has been exploring ways to salvage their Swiss-headquartered unit’s planned Shanghai listing—including moving forward with a smaller IPO.
"Listing on the main board will enable Syngenta Group to access more diversified investors and will be conducive for long-term value," said a spokesperson from Swiss agrichemical giant Syngenta Group.
It should be noted that ChemChina acquired Syngenta back in 2017 at an acquisition cost of $43 billion—the largest overseas acquisition by any Chinese company till date—which highlighted Beijing’s growing concern around food security.
Since then, preparations have been ongoing towards listing in mainland China; discussions have taken place between Sinochem Holdings Corp. and potential backers prior to public offerings.
In February 2021, when China introduced registration-based systems for all IPOs across domestic stock markets—intended as an easier and faster route—Syngenta withdrew its IPO application from STAR Market due consideration of both new regulations and inquiries received regarding lawsuits' risks within countries like Canada and U.S.A..
Accordingly—and despite facing queries about legal risk exposure—the company has been working on its IPO listing for nearly two years. Syngenta Group plans to allocate almost one-third of the IPO proceeds toward global acquisitions and approximately 20% to developing cutting-edge technology, thereby securing a stronger position within the competitive agrichemical industry.