Syngenta’s upcoming IPO: warning against hidden investment risks!

Zurich / Lausanne, 15. December 2022

Five years after it was delisted, Syngenta has announced an “Initial Public Offering” (IPO) in China by the end of the year. Against this backdrop, a study commissioned by Public Eye calculated for the first time the commercial risks presented by Syngenta’s business model which puts profit over people and the environment. Alongside many ongoing legal cases and increasing numbers of bans imposed on its outdated pesticides, climate damage caused by the company’s synthetic fertilizer business could have particularly high costs. Together, these sources of risk could cost the Basel-based company – and with it, its investors – up to a three-digit billion amount. 

Shortly after it was acquired by state-owned ChemChina in 2017, Syngenta was delisted from the SIX Swiss Exchange. This summer, the new owners announced plans for comeback to the capital market on the Shanghai Stock Exchange STAR “before the end of 2022”. At USD 45 billion it would be one of the largest listings of the year at the global level. Intended is also a second listing in Switzerland. Before listing on the stock exchange, companies have to inform potential investors of commercial risks through an IPO prospectus (which in this case is only available in Chinese). This document mentions Syngenta’s ongoing legal battles and stricter regulation of its pesticides, whose negative impacts on people and the environment are being increasingly well documented. But the agrochemical company refrains from providing any figures on the potential financial impacts of these important issues. 

Moreover, the prospectus fails to say anything about the climate killer hiding in the company’s portfolio – unsurprisingly, because the fertilizer business now brings in 14% of global revenues yet presents significant commercial risks. Financial analysts at Profundo discovered this in the pioneering study undertaken for Public Eye. Based on emissions estimates of the fertilizer industry, the Amsterdam-based research institute calculated that from 2016 to 2050 this branch of Syngenta’s business must have caused at least nine times as many greenhouse gases with its fertilizers as it does with its pesticides and seeds. Using EU carbon prices as a basis, Profundo estimated the possible cost impacts over this period to be USD 127.4 billion. A calculation based on the assumption that in future the total emissions (including those from fertilizers) of the Group – which alongside Syngenta AG also comprises pesticide producer Adama and the agricultural branch of Sinochem – are priced in. The figure is three times the sought-after market capitalisation at the IPO.  

The financial risks of the health and environmental problems caused by Syngenta’s products are also huge. Profundo calculated the potential liabilities directly attributable to pesticides for the treatment of two occupational diseases among users of Paraquat & Co and of treating drinking water following pesticide contamination. Through this alone, Syngenta could face global costs between USD 7.2 to 14.4 billion. In addition, there are millions of cases of acute pesticide poisonings arising every year. Soon the company could be forced to pay in numerous legal cases. Even if it only has to compensate the 2,000 people who, after contracting Parkinson’s disease, have taken Syngenta to court in the US and Canada, could end with bills in the billions. In addition, there are demands of Canadian beekeepers who hold Syngenta accountable for the decimation of bee populations. 

All this shows:Syngenta’s current business model is hiding huge legacy financial risks and is not fit to withstand the challenges of our time such as climate change. Investing in the future certainly looks different. 

More information here or contact 

Oliver Classen, Spokesperson, +41 44 277 79 06, oliver.classen@publiceye.ch  

Carla Hoinkes, Agricultural Expert, +41 44 277 79 04, carla.hoinkes@publiceye.ch