Takeover de­layed

EU reg­u­la­tors yet to okay the $43b deal, seek ‘large amount’ of ex­tra in­for­ma­tion

China Daily (USA) - - FRONT PAGE - By ZHONG­NAN zhong­nan@chi­nadaily.com.cn

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.

REUTERS

A re­searcher uses a pipette to de­velop method to de­tect spe­cific gene of corn at a lab in Syn­genta Biotech Cen­ter in Bei­jing.

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