U.S. regulators are taking more time to study ChemChina's deal to buy Syngenta, says Bloomberg, citing the Swiss seed and ag chemical company. The transaction is one of three that would transform the seed and chemical sector into a "big three" from a "big six."
With state-owned ChemChina prepared to take over Syngenta, one of the largest seed companies in the world, Senate Judiciary chairman Chuck Grassley wants to know if the Chinese company would invoke sovereign immunity against lawsuits in U.S. courts. "If they fail to answer my questions, it ought to raise a big red flag with our regulators checking the antitrust laws against the mergers," Grassley told reporters according to DTN.
Since World War Two, the U.S. food supply has come from a network of fewer but larger farms. And the groups representing those highly mechanized operations told the Senate Judiciary Committee that they could accept, with sufficient safeguards, mergers that would convert the six largest seed and agricultural chemical companies into a "big three."
The seed and ag-chemical industry "is seemingly on the precipice of a significant structural transformation," says Senate Judiciary chairman Charles Grassley in remarks written for today's hearing on consolidation in the sector. Five of the "big six" companies are involved in mergers while two Canadian companies are combining to form the world's largest fertilizer company.
Ahead of a Senate Judiciary Committee hearing on consolidation in the seed and ag chemical sector, the Justice Department and the Federal Trade Commission say they will consider the combined impact of mergers as well as the import of each deal. If they go forward, the mergers would result in three dominant companies in the sector instead of the current six.
U.S. farm income is down sharply from the records set in 2013, with little improvement forecast in the near term. "If something doesn't change between now and 2018, we will be in a big crisis," said Zippy Duvall, president of the largest U.S. farm group, during a luncheon session with reporters, referring to the target date for Congress to overhaul farm policy law.
Two of the largest seed and agricultural chemical companies of the world, Bayer and Monsanto, will combine in a deal valued at $66 billion. Monsanto chief executive Hugh Grant said the merger, in which Bayer buys Monsanto for cash, will result in "an innovation engine that pairs Bayer’s crop protection portfolio with our world-class seeds and traits and digital agriculture tools to help growers overcome the obstacles of tomorrow."
The Justice Department filed an antitrust lawsuit in federal court in Chicago to block Deere and Co., the world's largest farm equipment maker, from buying Precision Planting, its chief competitor in selling high-speed seed planters to farmers. The government says the two companies account for at least 86 percent of sales of the planters, which are expected to become the industry standard.
Senate Judiciary Chairman Chuck Glassley of Iowa said he would hold hearings next month on "a wave of consolidation among seed and chemical producers, including the merger of Dow and DuPont," the Des Moines Register reported. The announcement came one day after the Committee on Foreign Investment in the United States approved the $43 billion merger of ChemChina and Swiss-based Syngenta, which has significant operations in the United States.
China National Chemical Corp. said it had received clearance from the Committee on Foreign Investment in the United States for its $43 billion acquisition of Swiss-based Syngenta, the New York Times reported. The approval removed one of the biggest potential challenges to the deal, the paper said.