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