EU probes ChemChina’s US$44b ac­qui­si­tion of Syn­genta

The Myanmar Times - - International Business -

THE Euro­pean Com­mis­sion has opened an in-depth in­ves­ti­ga­tion into state-owned ChemChina’s US$44 bil­ion takeover of Swiss seeds gi­ant Syn­genta to see if it would hurt com­pe­ti­tion.

“We need to care­fully as­sess whether the pro­posed merger would lead to higher prices for farm­ers,” EU com­pe­ti­tion com­mis­sioner Ma­grethe Vestager said.

The deal – the big­gest in a se­ries of Chi­nese over­seas ac­qui­si­tions – would com­bine Syn­genta, a global leader in seeds and crop pro­tec­tion, with ChemChina, which con­trols Adama, the largest sup­plier of generic crop pro­tec­tion prod­ucts in Europe.

“The trans­ac­tion would take place in an in­dus­try that is al­ready rel­a­tively con­cen­trated,” the Com­mis­sion said.

In a joint state­ment, ChemChina and Syn­genta said they would “con­tinue con­struc­tive dis­cus­sions with the EU au­thor­i­ties in or­der to con­clude the re­view as early as pos­si­ble”.

The Com­mis­sion probe will run to March 15.

Syn­genta said this week it was con­fi­dent the deal would go through, having al­ready been cleared in the United States and Ja­pan.

The Com­mis­sion said ini­tial in­ves­ti­ga­tions showed the new com­pany would have “rel­a­tively high com­bined mar­ket shares” in sev­eral cat­e­gories.

Given the global scope of Syn­genta and ChemChina, the Com­mis­sion said it would co­op­er­ate closely with other com­pe­ti­tion au­thor­i­ties, no­tably in the US, Brazil and Canada.

The deal is just one of sev­eral huge takeovers in the agro-chem­i­cal sec­tor, with Ger­man gi­ant Bayer of­fer­ing US$66 bil­lion for US firm Mon­santo, which in 2015 had tried to ac­quire Syn­genta for $46 bil­lion.

If the Com­mis­sion finds fault with a pro­posed merger, it can re­ject the deal, but more usu­ally it asks the com­pa­nies to sell parts of the busi­ness to min­imise the im­pact on cus­tomer choice and price.

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