ChemChina (Beijing) and Syngenta (Basel) today announced that they have received approval from the US Federal Trade Commission (FTC) for the proposed $43 billion acquisition of Syngenta by ChemChina.
This represents a major step towards the closing of the transaction, which is expected to take place in the second quarter of 2017, Syngenta says. Approval from the EU Commission, expected this month, is the last major hurdle for the deal, first announced in February 2016. “The ChemChina-Syngenta transaction will ensure continued choice and ongoing innovation for growers in the USA and around the world,” Syngenta said today.
To secure FTC approval, the companies agreed to divest ChemChina’s generic production of the herbicide paraquat, used to clear fields prior to growing seasons; the insecticide abamectin, used on citrus and tree nut crops by killing mites, psyllid, and leafminers; and the fungicide chlorothalonil, used for peanut and potato crops.
Syngenta is a producer of the branded versions of the three pesticides, giving it significant market shares in the US, while Adama (Tel Aviv), ChemChina’s generic agchems producer, sells the generic versions to US farmers. Adama is among the leading generics suppliers in the US for each of these products.
Without the proposed divestment, the merger would eliminate the direct competition that exists today between ChemChina’s generics subsidiary Adama and Syngenta’s branded products. The merger would also increase the likelihood that US customers buying paraquat, abamectin, and chlorothalonil would be forced to pay higher prices or accept reduced service for these products, the FTC says. The deal is subject to ChemChina selling all rights and assets of Adama’s US paraquat, abamectin and chlorothalonil agchem businesses to AMVAC (Newport Beach, California). Syngenta and Adama control about 25% of the global agchems market.
The deal with ChemChina has received approvals from many global jurisdictions and is awaiting clearance from the EU, China, India and Mexico, Syngenta says.
The ChemChina-Syngenta transaction is one of three major deals in the consolidation of the global agchems industry. The other deals are a proposed merger of Dow Chemical and DuPont and Bayer’s plan to merge with Monsanto.
By Natasha Alperowicz
Source: Chemical Week
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