EU Opens In-Depth Probe Into ChemChina's Bid for Syngenta
October 28 2016 - 1:00PM
Dow Jones News
By Natalia Drozdiak
BRUSSELS--The European Union's antitrust watchdog on Friday said
it opened an in-depth probe into plans by China National Chemical
Corp. to acquire Syngenta AG to assess whether the deal would lower
competition for crop protection products and the supply of some
input chemicals.
The European Commission said the two companies, especially
through ChemChina's Adama unit, have "strong overlapping
portfolios" of crop protection products, such as herbicides and
insecticides, and noted that the "transaction would take place in
an industry that is already relatively consolidated." The
commission set a deadline for March 15 to complete its review.
"We need to carefully assess whether the proposed merger would
lead to higher prices or a reduced choice for farmers," said EU
Antitrust Chief Margrethe Vestager.
The announcement was expected after Swiss seed and pesticide
maker Syngenta said earlier this week that regulatory approval of
its proposed acquisition by ChemChina is likely to be delayed into
early 2017 as regulators seek more information amid a consolidation
wave in the sector.
Syngenta's review comes as the EU is faced with a wave of large
tie-ups in the sector, including plans by Bayer AG to acquire
Monsanto Co. and plans by Dow Chemical Co. and DuPont Co. to first
merge and then subsequently split in three.
The EU usually assesses mergers on a case-by-case basis and in
the order in which they have been officially registered with the
regulator. But the EU's antitrust chief, Margrethe Vestager, has
previously signaled that her department's review of the deals would
take into consideration the fact that several mergers in the
agricultural sector were taking place at one time.
Syngenta this week said the announcement of the Bayer-Monsanto
deal prompted more requests for information from regulators about
their own deal with ChemChina.
Syngenta hasn't submitted remedies to the commission but earlier
this week said if remedies were requested from European or U.S.
regulators, the company would work with them to "resolve these as
quickly as possible."
The EU said it was cooperating closely on the investigation into
the deal with other competition authorities around the world,
including those in the U.S., Brazil and Canada.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
October 28, 2016 12:45 ET (16:45 GMT)
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