EU regulators yet to okay the $43b deal, seek ‘large amount’ of extra information
EU regulators seek information on a Chinese company’s bid for Syngenta AG.
Uncertainty continues to cloud State-owned China National Chemical Corp’s attempt since February for a $43-billion takeover of Syngenta AG, the Swiss agrochemical and seed producer, as regulators in Europe are yet to approve the proposed deal.
Syngenta announced on Tuesday in its third-quarter earnings statement that the deal is expected to be pushed back to the first quarter of 2017 as “regulators in the European Union and elsewhere have recently requested a large amount of additional information”.
The statement further said Syngenta and ChemChina remain fully committed to the deal and are confident of its closure.
“This move shows Syngenta is still seeking more time to prepare materials and evidence to show that the purchase doesn’t involve antitrust issues,” said Ding Lixin, a researcher at theChinese Academy of Agricultural Sciences in Beijing.
The European Union is scheduled to announce its decision on the deal by Friday. But that deadline appears likely to be extended by several months, given Syngenta’s statement on Tuesday.
ChemChina announced in February that it agreed to purchase Syngenta, which has global operations, including in theUnited States.
In August, the Committee on Foreign Investment in the US approved the deal. But regulatory reviewsby the EuropeanUnionandChina’sMinistry ofCommerceare pending.
Through the proposed deal, ChemChina aims to become the world’s largest supplier of pesticides and other crop-care chemicals.
But, Dow Chemical Co’s merger with DuPont Co and Bayer AG’s possible purchase of Monsanto Co will likely reorder the rankings.
The top six suppliers are vying for market share and financial resources to push research and development of newproducts.
Ding said the ChemChinaSyngenta deal entails a big investment, but that would be necessary because China’s pesticide industry is riddled with low profitability, and only global scale could improve the scene.
Xu Hongcai, a researcher with the China Center for International Economic Exchanges, said as legislative bodies in Australia and Germany have recently questioned whether China’s rising investment in their high-tech sectors would hurt their economy or not, it is necessary for ChemChina and Syngenta to carry out every procedure carefully to complete their deal.
A researcher uses a pipette to develop method to detect specific gene of corn at a lab in Syngenta Biotech Center in Beijing.