During the European Commission's initial investigation it identified preliminary concerns in a number of these crop protection markets and suggests that:
- the parties have relatively high combined market shares in many of these markets, and that at least some of each party's products may compete directly with those of the other;
- Adama may be an important generic competitor of Syngenta in many of these markets;
- for a company that focuses on generic crop protection products, Adama has a broad portfolio of products, wide geographic coverage and good access to downstream distributors.
The European Commission therefore has preliminary concerns that the proposed merger may reduce competition in these markets and that this in turn may have an impact on price and choices for farmers.
In addition to examining crop protection markets, the in-depth investigation will verify whether the merger may negatively affect Syngenta's and ChemChina's supply of active ingredients. These are the key chemical input for other manufacturers to make crop protection products.
The purchase is undergoing regulatory review in various countries. It would combine Syngenta of Switzerland, one of the main global seeds and crop protection companies, and ChemChina of China, which controls Adama, the largest supplier of generic crop protection products in Europe.
The deal was first announced in February 2016 and initially was expected to close by the end of 2016. It has faced some hurdles in the various countries that must give approval. U.S. leaders have expressed concerns regarding the use of U.S. sovereign immunity, and the E.U. started an investigation in October amid competition misgivings.
ChemChina said on Dec. 20 that all terms and conditions of the tender offers remain unchanged. It is aiming to obtain the remaining outstanding approvals in the first quarter of 2017.