Photo courtesy of Syngenta.
|Margrethe Vestager, commissioner.|
Commenting on the Commission’s decision to clear the deal, Margrethe Vestager, commissioner, said, “It is important for European farmers and ultimately consumers that there will be effective competition in pesticide markets, also after ChemChina’s acquisition of Syngenta. ChemChina has offered significant remedies, which fully address our competition concerns. This has allowed us to approve the transaction.”
The decision follows an in-depth review of the transaction. The Commission had concerns that the transaction as originally configured would have reduced competition in a number of existing markets for pesticides. Furthermore, the Commission had concerns that the transaction would reduce competition for plant growth regulators. The Commission's investigation focused on competition for existing pesticides, since ChemChina does not compete with Syngenta for the development of new and innovative pesticides.
To appease the Commission, ChemChina offered a set of commitments, including plans to divest:
• 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.
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. In late February, ChemChina extended its $43 billion offer for Syngenta to April 28 as it seeks to gain regulatory approvals.
“The ChemChina-Syngenta transaction will ensure continued choice and ongoing innovation for growers in Europe and around the world,” Syngenta said.