Syngenta ChemChina Deal Gets Closer as EU Regulators Examine Merger

03 March 2017 --- Following Syngenta and ChemChina making minor concessions to EU regulators recently, reports say the US$43 billion merger is on track to be approved in Europe. 

The two agricultural giants made small concessions to allay concerns that this deal could hamper competition in the European market. 

The deal has already been given the green light from a US national security panel, which removed a significant hurdle as critics had expressed concerns about a Chinese state-owned company becoming a major player in the US food chain. 

It has also received the backing from Australian regulators, but is still being investigated by the European Commission amid concerns a merger could reduce competition in the market and impact on costs for farmers.

The Commission’s preliminary concern is that Syngenta and ChemChina each have strong partially overlapping portfolios of crops protection products such as herbicides, insecticides, fungicides and plant growth regulators.

These products are used for the cultivation of several of the main crops grown in Europe, including cereals, cotton, corn, fruits and vegetables, oilseed rape, soybean, sugarbeet and sunflowers.

However, following the adjustments made recently, the EU looks on track to approve the merger - one of three huge mergers on the table that will dramatically shake up the global food industry.

While ChemChina’s US$43 million purchase of the Swiss-based seed giant is the largest cross-border transaction, it is the second of three huge deals that are being examined by EU competition commissioner this year - the others are Bayer’s US$ purchase of Monsanto, which was initially announced in September 2016, and is expected to be scrutinized by European competition regulators over the coming months, and Dow Chemical DuPont’s US$140 billion merger which is on track for approval this month.