The $43 billion purchase of Swiss-based Syngenta by state-owned ChemChina has the approval of U.S. and EU regulators, keeping in motion a wave of consolidation in the seed and ag chemical sector. ChemChina agreed to divest a large part of its European pesticide operations to satisfy the competition concerns of regulators on both sides of the Atlantic.
The ChemChina purchase is the largest ever by a Chinese company, said The Wall Street Journal. It previously was approved by a U.S. panel that examines the national security aspects of foreign investment in the United States. Last week, the EU approved the merger of Dow and DuPont. Still pending are the proposed merger of Bayer and Monsanto. Together, the deals would create a “big three” in the seed and ag chem industry from the current “big six.”
The EU said its approval “is conditional on the divestiture of significant parts of ChemChina’s European pesticide and plant growth regulator business.” A key element will be sale of business by Adama, an Israel-based subsidiary.
To win approval by the Federal Trade Commission, ChemChina “agreed to divest several pesticides manufactured by Adama Agricultural Solutions Ltd., an Israeli-based ChemChina subsidiary that focuses on generic chemicals,” said The Wall Street Journal.