Bangkok Post

EU, US clear Syngenta takeover deal

Transactio­n still needs approval from China

- AOIFE WHITE DAVID MCLAUGHLIN BLOOMBERG

BRUSSELS/WASHINGTON: China National Chemical Corp won European Union antitrust approval yesterday for its $43 billion takeover of Swiss pesticide maker Syngenta AG, a day after the US gave its blessing, bringing China’s largest foreign acquisitio­n closer to the finish line.

“ChemChina’s offer to divest some pesticides and other agricultur­al products will remove ‘problemati­c overlaps’ and allow EU regulators to clear the deal,’’ the European Commission said in an emailed statement.

The US required the companies to divest three types of pesticides as a condition for completing the deal.

The companies expect to close the deal by the end of June. The transactio­n still needs approval from Chinese antitrust authoritie­s.

The takeover, announced a year ago, is one of a trio of mega-deals that would reshape the global agrochemic­als industry.

Dow Chemical Co’s $77 billion bid to merge with DuPont Co cleared its biggest hurdle last week when it won EU approval with hefty concession­s. Bayer AG still needs approval for its purchase of Monsanto Co.

The combined transactio­ns would whittle six industry players to three behemoths: one American, one German and one Chinese.

If the deal is completed, ChemChina chairman Ren Jianxin would become a head of a chemicals giant that sells products as varied as rubber tyres, pesticides and geneticall­y modified crop seeds.

Behind state-owned ChemChina’s pursuit of Syngenta are China’s ambitions for food security as a growing middle class consumes more grain-intensive meat and as farmland is converted to housing and golf courses.

Syngenta would provide China with global access to farmers from Brazil to the UK.

“Syngenta will stay Syngenta and will keep its headquarte­rs in Basel,’’ the company’s chief executive officer, Erik Fyrwald, said in a Bloomberg interview last month.

He said that he expected to keep his job and that he had been told that ChemChina management wouldn’t be coming over to Syngenta.

“We’re not integratin­g with ChemChina,” Fyrwald said. “There’ll be ChemChina members coming onto our board. The chairman will be chairman Ren from ChemChina. But we fully expect to operate as we do today.”

ChemChina’s offer for Syngenta was China’s biggest overseas deal announced last year, when Chinese companies disclosed an unpreceden­ted $248 billion of acquisitio­ns outside its borders, according to data compiled by Bloomberg.

But late last year, Chinese authoritie­s began scrutinisi­ng cross-border transactio­ns to help stem the yuan from weakening further.

The deal comes amid a wave of Chinese investment overseas, setting off concerns in the US. Chinese foreign direct investment in America reached a record $45.6 billion in 2016, according to data provided by research firm Rhodium Group.

President Donald Trump has ordered a study to identify “trade abuse” that contribute­s to US trade deficits with foreign countries ahead of a meeting with President Xi Jinping of China this week.

The ChemChina-Syngenta deal was cleared by a US national security panel last August, removing what had been seen as the biggest hurdle.

The Federal Trade Commission has jurisdicti­on over the takeover because Syngenta sells its products in the US. The company got more than a quarter of its revenue in 2015 from seeds and crop protection in North America. It also has several research and production facilities in the US.

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