EU plans to ap­prove ChemChina bid

$43b ac­qui­si­tion of Syn­genta will sup­ple­ment Chi­nese firm’s busi­ness

Global Times - Weekend - - FRONT PAGE - By Huang Ge

State-owned China Na­tional Chem­i­cal Corp (ChemChina) is sched­uled to se­cure con­di­tional EU an­titrust ap­proval for its bid for Switzer­land-based seeds and pes­ti­cides com­pany Syn­genta, me­dia re­ports said Fri­day, cit­ing sources.

Ex­perts noted that the deal would help sup­ple­ment ChemChina’s busi­ness while also help Syn­genta seek growth in the global mar­ket.

In Fe­bru­ary 2016, ChemChina an­nounced that it had agreed to take over Syn­genta in a deal worth $43 bil­lion, ac­cord­ing to a state­ment posted on the web­site of ChemChina.

ChemChina could not be reached for com­ment as of press time.

In an ear­lier in­ter­view, a spokesper- son for ChemChina who de­clined to be iden­ti­fied told the Global Times that the takeover would have a pos­i­tive ef­fect on global food sup­plies and safety.

The deal would mark the largest-ever for­eign ac­qui­si­tion by a Chi­nese en­ter­prise, and the Euro­pean Com­mis­sion could pos­si­bly an­nounce its ap­proval in March, ahead of its April 12 dead­line, ac­cord­ing to Reuters.

The ac­qui­si­tion has how­ever en­coun­tered hur­dles in dif­fer­ent coun­tries and re­gions that must give their ap­proval.

The Euro­pean Com­mis­sion launched a probe in Oc­to­ber 2016 to as­sess whether the deal is in line with rel­e­vant reg­u­la­tions, say­ing they had con­cerns about po­ten­tially un­fair com­pet­i­tive ad­van­tages.

Com­mis­sioner Mar­grethe Vestager voiced con­cerns in a state­ment on the or­ga­ni­za­tion’s web­site, not­ing that “the pro­posed merger would lead to higher prices or a re­duced choice for farm­ers.”

How­ever, Li Jun­jie, a pro­fes­sor from the Ren­min Univer­sity of China, told the Global Times on Fri­day that “in fact, some con­cerns re­lated to com­pe­ti­tion are over­stated.”

Li elab­o­rated that the two com­pa­nies are ru­mored to have over­lap­ping busi­ness ac­tiv­i­ties, which will harm the growth of both par­ties; but that should be eval­u­ated in terms of how much their busi­nesses over­lap.

“The im­pact would be very slight if there are lim­ited over­lap­ping sec­tors,” he said.

Fur­ther­more, in re­sponse to con­cerns the takeover sparked among US politi­cians, the spokesper­son of China’s Min­istry of Com­merce Shen Danyang told a press con­fer­ence in April 2016 that the bid “couldn’t be any more nor­mal.”

ChemChina has agreed to mi­nor con­ces­sions to ease the Euro­pean Com­mis­sion’s con­cerns over its ac­qui­si­tion of Syn­genta, said me­dia re­ports.

The Chi­nese firm will di­vest a cou­ple of na­tional prod­uct reg­is­tra­tions, in­clud­ing ex­ist­ing prod­ucts and a few in the pipe­line, in more than a dozen EU coun­tries, the Reuters re­port said.

Yet we should re­mem­ber the deal is still to be fi­nal­ized, as takeovers al­ways go through many ap­proval pro­ce­dures, which are in­de­pen­dent and dif­fer­ent across var­i­ous coun­tries and re­gions, warned Li.

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