For most of Swiss shareholders it was more economical to receive a lower 'special' dividend and hence pay a lower withholding tax in exchange for a (supposedly) higher share price.

It's almost unbelievable that the Syngenta board agreed to a deal denominated in USD, meaning that all the forex risk is borne by the shareholders. Unbelievable, that is, until you realise that it was the board of Syngenta that agreed these terms...

<<this represents a final value of around CHF 463.70 per share, which is a bit of a bummer as SYNN was trading at CHF 471.20 on 11 May.>> a very friendly way to phrase it.

<<I'm surprised that so many shareholders accepted the ChemChina offer and the offer of the fixed exchange rate without knowing what that rate would be.>>
It was a first. I listened to the banker last year. Mainly because I was too lazy to study it all in detail. My phone-call today showed, that the guy knew less than me - he didn't even know what happened the past few days

It was a crap deal yet nothing I could have influenced really (except selling them myself). I'll have to put it down to learning and - whether I like it or not - in future show a bit more interest in finances than I was willing to so far. Those shares have been in the family for decades. No excuse I know but it's still different from watching over one's own deals.

Thanks folks. Next time the Chinese move in on one of our traditional companies I'll ask on EF first

Actelion take over is also in USD.

Not really, Syngenta produces accounts in USD.
Sales in Switzerland are insignificant, so offering CHF would produce a far higher risk to shareholders from an FX perspective.

i have noticed i am getting lot more CV's from syngenta these days? are people leaving?

The bulk of my company's sales are in the US, in USD. You think I want my monthly salary paid to me in USD?

Shareholders who live in Switzerland and bought SYNN in CHF received an annual dividend in CHF and want to be paid out now in CHF. They expect the company to deal with forex issues, just as they expect the company to provide the expertise to manufacture fertiliser and seeds. They don't expect to deal with all the vagaries of running an international business. That's the job of the board that the Swiss shareholders elected.

A little poetic licence here...

Scenario 1) Your an employee so you get treated with kid gloves.

Scenario 2) Your a part owner of the business & as such have to accept the vagaries of OWNING an international business.

Out of interest what percentage of the float is owned by Swiss residents?

Actually there are a lot of share holders of companies like Syngenta, Sandoz, Novartis in Basel who lived and worked with them .... from Ciba to Ciba Geigy to Novartis ....
My family is a "Novartis-family" and letting go of any of these shares is kind of more than just doing a business deal

But what I really meant with my original post was that I never bought them so gaining/losing money is not like for someone who got them speculating on finances only.

Hmmmmm. I just received payment for the Syngenta shares that I tendered to ChemChina, supposedly "benefiting" from the fixed USD/CHF exchange rate they were offering. The payout per share that I received was CHF 450.17. I make this to be more than CHF 10 below the agreed value of the shares.

Anyone out there who tendered their shares at the fixed exchange rate -- what was the sale price per share? Did you receive a different amount?

The good old Peter principle plays a role here, especially for executives promoted from within. It's pretty much a logical truism unless you pay particular attention to avoiding it.

Anyway, it was a fascinating post. I'm not in the industry, but I found it very interesting.

It took only 25 minutes, perhaps 30. Calmly, he explained the problems that he had encountered since he joined 26 months ago. He said that he knew there was a problem when he asked who was accountable, and it took at least 30 minutes for an answer to appear. He described the loss of focus in the organisation that had led to successive poor financial results, and which had moved the company from being an acknowledged leader, to a vulnerable pawn that had to be put up for sale to appease angry shareholders. Gently, he excoriated the lack of prioritisation and focus under previous leadership that had forced the company to look for a white knight, when its shareholder base was fragmented and interested only in an exit. He spoke of his hopes for the future under new ownership, and that it would bring the security and stability that the company needs. There were coded messages as well; a relisting on an Asian stock exchange is likely sooner rather than later, and this will allow deep structural changes to be made to the organization.

It’s unusual to see a company chairman deliver such hard truths to an audience of HQ staff, many of whom have never worked at the business coalface, and who are nervous about the future. But that’s exactly what Demare did yesterday in the Syngenta restaurant, and I tip my hat to him. It’s the first time I have seen anyone at this level in Syngenta acknowledge the truth in public – much of which I described in my first post here. I respectfully disagree with him on Monsanto, and think it is going to be very difficult to Syngenta to compete against Bayer-Monsanto, and Dow-Dupont, both of whom can deliver truly integrated businesses, and the acid test will be market shares in 3 to 4 years’ time.

Fyrwald followed – he’s not a natural speaker, but he looks to be a welcome change after the Svengali / Mafia years of Mack and Ramsay. He described the position with sugar beet; no one should be in any doubt now about why Pisk left last year. He described the changes he has made to the Seeds business leadership, and how people who would not respond to Syngenta two years ago are now picking up the phone. We need more of this, and less of the abstract McKinsey-driven ICS ideas, that don’t respond to how farmers make decisions about what to grow. He’s been in place for about a year, and so far market share continues to be lost, despite our competitors supposedly being distracted by internal merger discussions. That needs to turn around fast.

Patrick followed. 2000 – 2010 performance was excellent, and 2011 – 2016 performance was dire. Coincidentally, that was the period when this guy was head of commercial finance and responsible in large part for the results. Think about the difference between Syngenta’s commentary on its results during this period, which he would have written, and the reality that was being pointed out by BNP and JP Morgan. Take into account his performance in AOL delivery, where much of the landscape is not yet working. Or consider the Pulse feedback for finance, which indicated a group of dedicated people loyal to the company, who have minimal confidence in the ability of the FLT to deliver, and who reject the cronyism that compromises the performance management reviews. Draw your own conclusions.

And this is the point, to be blunt. To really move Syngenta out of its slough, much of the senior management that was in place during 2011 – 2016 needs to go. Start with finance, sure, but similar points could be made about P&S, or Business Services, or various territories with perhaps even more urgency. I hope that Demare and Fyrwald get this, and have the courage to make genuine change. This will not come from the ‘more of the same’ message from Patrick about productivity; real growth comes from vision, investment and honesty.

What a great post! As good a slice of the bleeding edge of corporate life as I ever seen. Thanks for sharing.

Good inside report and it applies to many large companies. What I find is missing most of the time you've pointed out:


Real growth comes from vision, investment and honesty.

No-one expected events to move so quickly! General expectations were that, in perhaps 5 years, there would have been a large technology transfer to China, along with a large part of production, R&D and administration, leaving Basel as a nominal Syngenta group HQ, but that this would be a gradual, well-managed process.

Of course, the signs have not been good since the acquisition of Syngenta by Chemchina completed in early June. Syngenta has continued to struggle in difficult market conditions against its major competitors (who were supposed to be distracted by their own mergers), and is finding that China’s reputedly deep pockets are surrounded by an impenetrable bureaucracy that frustrates even the most obvious business proposal. Fyrwald is beginning to look shrill and unconvincing, as results worsen, and full year depends ever more on a Brazil market that is on its knees.

There was a hiccup just before the acquisition completed, when Beijing wanted better understanding and transparency on the exposure to the US corn litigation. Don’t worry, they were told, we have this under control, and the exposure will be managed out over several years, and will probably be relatively insignificant.

Cue the disaster this week, when Syngenta tried to sell $7bn of bonds, under instruction from Chemchina to further leverage its balance sheet, to refinance the bridging loans that Chemchina had taken out to finance the acquisition. The message from investors to Syngenta was clear – you’re not investment grade, you’re junk (or near-junk), and you’re asking us to buy your bonds as if they are investment grade, when you yourselves have little visibility of how your exposure to the US corn litigation will play out. There was an acutely embarrassing five minutes when a potential investor explained to the Syngenta CFO that the ruling against Syngenta in Kansas would set a precedent for the remaining law-suits, and that the liability was much more real and present than the CFO realised. And then cue a rushed settlement, of $1.5bn, in order to try to get the bond to fly. It didn't as most investors decided not to participate. Jaws are dropping in Beijing as SASAC weighed representations during due diligence against what is now evident. Total chaos and humiliation is an understatement.

It was clear 18 months ago, and is just as clear now. Chemchina does not have deep pockets, and will not bring a long-term view. There is little capacity to compete for anything significant of the Bayer/Monsanto divestments, which means that the Syngenta Seeds business will probably remain a ‘weak third place player’ (Fyrwald’s own words). Syngenta is a company that has gone from a credit rating of A to BBB-, is highly leveraged, is being increasingly managed for short term cash, and is no longer in full control of its destiny.

A merger with Monsanto would indeed have brought job losses and disruption, but the majority of employees would have found a place in an industry leader that would have been independent, investment grade, and in control of its future. The stark contrast with this week’s brutal reality check highlights not only the poor decisions taken by Demare, Mack and Ramsay, but also how far the current management is out of its depth. An archetypal Greek tragedy, now unfolding inexorably and at pace.

Funny, you have a total of 3 posts all of which are about Syngenta and all which happen to be extremely negative. Disgruntled employee? Anyway, everything but objective.

Seems nobody answered that question of yours back then, I only just saw it.
I got Fr. 460.20 per share. I had tendered my shares in Swiss Franks and was payed accordingly.

Why object to a cogent opinion about a topic of their interest? Some EF members post every day, at almost every hour of the day, everything that crosses their minds.

Hapmojong, keep the updates coming.

Currently going through my own corporate Greek drama I am reading this thread with great interest. It is refreshing in a way to see it's happening all over. At the same time utterly depressing.