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Swiss agricultural chemicals company Syngenta has called off a $9bn Shanghai listing that would have been one of China’s largest initial public offerings in years, as the country’s stock markets struggle in the wake of a major rout.
Syngenta said on Friday that it was withdrawing its application to list on the Shanghai Stock Exchange’s main board “after careful consideration of [the] industry environment and the company’s own development strategy”.
It added that it would “continue to pay attention to China’s capital market and is willing to contribute to its healthy development”.
Syngenta said it would look to restart the listing process, either in China or a different global exchange, when the conditions are right and that it would also explore alternate sources of funding. It had planned to sell as many as 2.79bn new shares, representing about 20 per cent of the company, with the goal of raising Rmb65 ($9bn), according to its IPO prospectus last year.
The move underscores the difficulties of attempting to list in China, where investor confidence is fragile after a protracted stock market sell-off at the start of this year. The China Securities Regulatory Commission has also increased scrutiny of listings.
State-owned ChemChina bought Syngenta in a $44bn deal in 2017, then the largest-ever outbound takeover by a Chinese company, that was part of an overseas dealmaking spree led by ChemChina’s then-chair Ren Jianxin.
ChemChina bought the Italian tyre company Pirelli in 2015 and later merged with state-owned Sinochem in 2021. ChemChina had wanted to list Syngenta earlier but was delayed by the pandemic.
International banks Goldman Sachs, JPMorgan, Morgan Stanley, UBS and HSBC had spent months lobbying to work on the Syngenta listing, drawn to the prospect of advising a large international company that has for years worked with global banks.
But the listing has proved complicated for American banks because ChemChina was placed on a US government watchlist of companies with ties to the Chinese military.
Syngenta’s IPO prospectus, dated June 2023, named mainland banks CICC and Bank of China International as sponsor banks and Citic Securities as the underwriter. The banks did not immediately respond to requests for comment.
The Shanghai Stock Exchange said on Friday that it had stopped reviewing Syngenta’s IPO upon withdrawal of the application.
China’s benchmark CSI 300 index, which contains the largest and most liquid Shanghai- and Shenzhen-listed stocks, hit a five-year low in early February, though it has rebounded in recent weeks on government-led buying aimed at shoring up the market.
The IPO’s cancellation comes as Chinese officials are exerting more control over markets.
“We need to think thoroughly about the relationship between investment and fundraising,” Wu Qing, the recently appointed head of CSRC, told reporters at a briefing on March 6.
“These two major functions of the market complement each other. Without investment, there will be no financing, and without buyers, there will be no sellers. Only with balanced development of investment and financing can the capital market form a virtuous cycle,” he said.