This morning (April 12), the China National Chemical Corporation, known as ChemChina, and Syngenta announced that they have received approval from the Ministry of Commerce of the People’s Republic of China for the proposed acquisition of Syngenta by ChemChina — at $43 billion, it’s the largest foreign acquisition by a Chinese company.
In a statement, the companies note that this approval represents another step toward closing the transaction, which is expected in the second quarter of 2017.
Last week the U.S. and European Union competition authorities gave conditional approval of the deal, which was followed by Mexico’s approval earlier this week. India has not yet signed off on the deal.
Under the conditions set by the U.S. Federal Trade Commission, Syngenta must divest three pesticides: paraquat, abamectin and chlorothalonil. Syngenta owns the branded version of each of the three products, giving it significant market shares in the United States. ChemChina’s 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.
The FTC believes that “without the proposed divestiture, the merger would eliminate the direct competition that exists today between ChemChina generics subsidiary ADAMA and Syngenta’s branded products. The merger would also increase the likelihood that U.S. customers buying paraquat, abamectin, and chlorothalonil would be forced to pay higher prices or accept reduced service for these products.”
The proposed settlement requires ChemChina to sell all rights and assets of ADAMA’s U.S. paraquat, abamectin and chlorothalonil crop protection businesses to California-based agrochemical company AMVAC.
For more information about the consent agreement, which includes an asset maintenance order and allows the commission to appoint a monitor, check out the analysis to aid public comment.
The two companies maintain that the completion of this transaction will ensure continued choice and ongoing innovation for growers around the world.
For more on the recent events regarding the acquisition, read “Mexican Competition Authority Approves ChemChina’s Acquisition of Syngenta.”
