Syngenta: no need for merger sale of ChemChina subsidiary
• Swiss seeds and pesticides group to focus on biotech research, while Adama will continue production of generics
Syngenta, the Swiss pesticides and seeds group being taken over by ChemChina, did not expect antitrust regulators to force the Chinese state-owned company to put its subsidiary Adama up for sale, Syngenta’s CEO said on Tuesday.
“Adama will not need to be sold. There will be some remedies in both the US and the EU, but I can’t speak to any details,” Erik Fyrwald said on the sidelines of the World Economic Forum in Davos.
Unveiling details about Syngenta’s future role in ChemChina for the first time, Fyrwald also said Israel-based Adama, a maker of generic versions of pesticides without patent protection, would not be folded into Syngenta, allowing the Swiss group to focus on research.
The companies are working to finalise agreements with regulators in the US and EU about the $43bn takeover, which would be the largest outbound acquisition by a Chinese firm.
Sources close to the matter said last week that ChemChina and Syngenta had proposed minor concessions to the EU’s competition watchdog, with one person saying it was unlikely Adama Agricultural Solutions would have to be divested.
The EU Commission recently extended its review of the deal to April 12 and Fyrwald said he was “highly optimistic that by that time, we’ll have made sufficient progress in the US and EU to be going forward”.
Adama would continue to be managed separately because “we’re an R&D [research and development] company and they’re a generic company”.
Instead, Syngenta would drive an expansion of plant biotech research in China ahead of an expected easing of regulatory limits. China has not yet permitted the cultivation of biotech food crops but its plan for science and technology to 2020, published last August, unveiled the country’s farreaching ambitions in genetically engineered agriculture.
Fyrwald suggested China could become a hub in the development of new gene editing procedures that refrain from using bits of genetic code from different species.
Under the conventional transgenic approach, a bacteria’s bug-killing ability has, for instance, been commonly used for many genetically modified crops. However, Fyrwald said new technologies would draw on a plant’s existing genome, and it would not be considered genetically modified.