ChemChina’s bid to acquire Syngenta has received a pair of major regulatory approvals on both sides of the Atlantic.
The European Commission gave a conditional green light to the deal early Wednesday, less than 24 hours after the U.S. Trade Commission approved the US$43 billion takeover.
Both approvals require ChemChina divest crop protection assets owned by its subsidiary Adama, as several of the Israel-based generic supplier’s products are direct competitors with Syngenta’s branded products.
The proposed settlement with the U.S. Trade Commission requires ChemChina sell all rights and assets of Adama’s U.S. paraquat, abamectin and chlorothalonil crop protection businesses to California-based agrochemical company AMVAC.
“Syngenta owns the branded version of each of the three products at issue, giving it significant market shares in the United States. ChemChina subsidiary Adama focuses on generic pesticides and is either the first- or second-largest generic supplier in the United States for each of these products,” noted the Trade Commission in a statement.
The E.U. approval also requires Adama sell a significant part of its pesticide business, as well as its plant growth regulator business for cereal crops.
The E.U. Commission’s statement on Wednesday doesn’t specifically name active ingredients, but it says ChemChina’s commitments include divesting:
- a significant part of Adama’s existing pesticide business, notably fungicides for cereals, fruits and oilseed rape, herbicides for cereals, corn, sunflower and vegetables, insecticides for cereals, corn, fruits, oilseed rape, and vegetables and its seed treatment products for cereals and sugar beet;
- some of Syngenta’s pesticides, notably fungicides for vegetables and herbicides for cereals, vegetables and sunflower;
- 29 of Adama’s generic pesticides under development and access to third parties to studies and field trial results for these products;
- a significant part of Adama’s plant growth regulator business for cereals; and
- all relevant intangible assets underpinning the divested pesticide and plant growth regulator products. They will also make available relevant personnel.
The E.U. Commission noted “in all product markets with problematic overlaps ChemChina will divest either Adama’s or Syngenta’s product.”
The Syngenta-ChemChina deal has also cleared the Competition Bureau in Canada. The Bureau issued a “no-action letter” in February, saying it found it the transaction “is not likely to lead to a substantial lessening or prevention of competition.”
With these major approvals in place, Syngenta says it expects to close the sale to ChemChina in the second quarter of 2017.
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