Just a week after Israel Chemicals Chairman Nir Gilad announced he would be stepping down in September, CEO Stefan Borgas may be leaving too to take the top job at Swiss agrochemicals group Syngenta.
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Borgas is reportedly in talks with Ren Jianxin, the chairman of China National Chemical Corporation (ChemChina), which acquired Sygenta last month for $43 billion. Sources speculate that the two first made contact when ICL formed a phosphate joint venture with Yunnan Yuntianhua in China last year.
German-born Borgas has been a member of the board of Sygenta, the world’s biggest maker of crop-protection chemicals, since 2009. Before joining ICL as CEO four years ago, he had been CEO of Lonza Group.
On Monday, ICL denied Borgas was stepping down. “There has been no change in the role and status of Stefan Borgas. ICL doesn’t intend to comment on media speculation and won’t respond,” an ICL spokeswoman said. Reuters said that Syngenta was not immediately available for comment either.
Shares of ICL closed down 1.2% to 16.61 shekels ($4.31).
Borgas has reportedly had a tense relationship with Idan Ofer, who controls ICL through his holding company The Israel Corporation, over the two related issues of poor earnings performance at ICL and dividend policy.
ICL boosted net profit last year, but revenues fell to $5.4 billion from $6.1 billion in 2015 while operating profits dropped to $1.8 billion from $2.2 million. The weaker results have put pressure on the company to reduce its dividend, which is currently set at 70% of net profit.
Last week the credit ratings agency Fitch lowered ICL’s outlook to Negative from Stable, saying it was concerned that the company hadn’t proposed a change in its dividend or capital spending policies that would allow it to reduce its debt ratio.
When Gilad’s departure was announced last week, ICL put out an unusual statement that said “ICL’s board wants to express its appreciation to Borgas and the company’s management, which in coordination with management continues to move forward with the ‘Next Step Forward’ policy establishing an integrated business with a proper balance between growth, efficiency and a consistent return to shareholders.”
The policy was unveiled in August 2013, a year after Borgas took over as CEO, and aims to focus ICL’s business in three core areas – agrochemicals, food additives and engineered materials – as well as expanding operations abroad, especially emerging markets like China.
Part of the strategy led to the joint venture with Yunnan Yuntianhua, China’s No. 3 phosphate maker, and taking a 15% stake in the company.
Meanwhile, an opening has emerged at Sygenta. Its previous CEO, Mike Mack, stepped down in October after the company rejected a takeover approach from U.S. rival Monsanto. He was replaced on an interim basis by the company’s chief financial officer, John Ramsay.
Syngenta has said after the ChemChina deal that future leadership appointments would be made in close coordination with ChemChina.