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 company will now immediately apply for a listing on the main board in Shanghai as they aim to expedite access to funding within China's $10.5 trillion equity market.
The decision comes following an expansion of a registration-based system for listings on all exchanges beyond the Star board earlier this year. Sinochem Holdings Corp has been exploring ways to rescue their planned Shanghai listing for Swiss-headquartered subsidiary Syngenta, including moving ahead with a smaller IPO.
In 2017, Syngenta was acquired by China National Chemical Corp., or ChemChina, for $43 billion – marking a record-breaking overseas acquisition that demonstrated Beijing's increasing concerns about food security. Preparations for the company's public offering have been ongoing since then, with talks being held between parent companies and potential backers prior to going public.
"Listing on the main board will enable Syngenta Group to access more diversified investors and will be conducive for the company’s long-term value," says one representative from Swiss agrichemical giant Syngenta Group.
Working towards securing a mainland China listing over nearly two years, Syngenta had initially applied for an IPO on STAR Market before deciding against it due to recent changes in regulations introduced by China. In February 2021, China transitioned into using what they call "a registration-based system" designed specifically to make it easier and faster for businesses like Syngenta seeking opportunities within domestic stock markets.
As part of these preparations leading up toward their IPO release date earlier this year, officials at both companies faced numerous inquiries from regulators at various levels — most notably concerning risks associated with lawsuits originating from countries such as the U.S. and Canada.
In 2021, Syngenta Group declared their intent to use almost one-third of IPO-generated proceeds for global acquisitions while earmarking another fifth specifically for the development of cutting-edge technology. This decision illustrates the company's strategic objectives as they move forward with their listing on Shanghai's main board, expanding their reach within China and worldwide markets alike.