Chinese state-backed China Chemical Corporation (ChemChina) is winning the hands of Syngenta with a mammoth $43 billion bid, following year-long talks.
The Swiss seeds and pesticides company warmed up to a potential partnership with the Chinese major after it rebuffed a takeover bid from US giant Monsanto last year.
After Syngenta fended off a bid from Monsanto, ChemChina called them up and asked if they should play the white knight, a source close to the negotiations told Reuters.
After the negotiators reached the deal a ChemChina veteran said they had been pursuing Syngenta for more than a decade and the Swiss company was like a "goddess that we hoped one day we could win."
So what gave the Chinese state player an adrenalin rush?
Food security
The Syngenta deal will give China headway in its efforts to ensure the food security of its billion-and-a- half people.
Despite the vast landmass China has, it faces issues such as shrinking farmlands, unbridled industrialization and urbanization, migration of famers into cities and excessive use of chemical and pesticides.
Modern technologies used in farm chemicals, seed production and less harmful pesticides will improve the country's food production and help protect natural resources and environment.
"Only around 10 percent of Chinese farmland is efficient. This is more than just a company buying another. This is a government attempting to address a real problem," a source close to the deal told Reuters.
Regulatory approval
Unlike a deal with Monsanto, the merger with ChemChina will pass regulatory approvals more easily.
ChemChina does not have significant presence in agricultural chemicals business, and that makes it easier for its bid leap over various regulatory hurdles.
Syngenta rejected Monsanto's $46 billion offer last year basically because of worries over regulatory hurdles in the US.
Monsanto-Syngenta merger would have created the world's biggest seeds and crop chemicals monopoly.
Though the deal doesn't involve an American company, it will still face the stiffest regularity scrutiny in the US.
Some analysts say the deal will come under the hawk eyes of the US Committee on Foreign Investment (CFIUS), which will look at the deal from many angles including national security and food security.
The US could be worried over rising Chinese influence in its backyard as Syngenta does billions of dollars worth of business in the country.
Assured funds
Syngenta has said one of the reasons why it gravitated to the ChemChina deal was that the Chinese company had secured 100 percent of its funding requirements.
"The key issue for us is that we were never going to reach an agreement unless funding was certain and confirmed," a Syngenta insider told Reuters.
"That's what they achieved through the month of January; what clinched the deal ultimately was the ability to confirm to us that funding was in place."
When takeover is completed
The $43 billion deal is the biggest foreign acquisition by a Chinese company.
When the takeover is completed ChemChina Chairman Ren Jianxin will become the head of the Swiss company while four of the existing directors of Syngenta will sit on the 10-member board.
Though Syngenta deal will be the biggest takeover by ChemChina, it had made some high-profile acquisitions in the past -- Italian tyremaker Pirelli, German machinery maker KarussMaffei and an Israel's pesticides producer.
The deal is however, not the biggest in the chemicals industry. It will be the second biggest after the $130bn Dow Chemical-DuPont merger announced in December.
If the deal falls apart
If the deal fails to come through, ChemChina will pay about $3 billion in fees to Syngenta. If the deal falls apart due to problems from Syngenta, then the Swiss company will pay ChemChina $1.5 billion.
