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The EU has cleared ChemChina’s $43bn purchase of Syngenta, bringing China’s largest cross-border acquisition one step closer to completion.
Margrethe Vestager, Europe’s antitrust watchdog, approved the sale of the Swiss agricultural giant to state-owned ChemChina after it promised to sell “significant parts” of its European pesticide and plant growth regulator business to mitigate competition concerns.
Effective competition in the pesticide market was important to European farmers and consumers said Mrs Vestager, adding that she approved the transaction as “ChemChina has offered significant remedies, which fully address our competition concerns”.
The commission said it was worried about higher prices or less choice for crop protection products – which are chemicals that regulate plant growth and kill pests – as ChemChina would own both Syngenta and Adama, a Tel-Aviv-based generic competitor, after the deal closed.
Adama is the world’s biggest producer of generic pesticides and is a “a close and important generic competitor of Syngenta in many markets” according to the regulator.
Adama will sell a significant part of its existing pesticide business and 29 generic pesticides under development, along with intangible assets and relevant personnel. Syngenta will sell some specific fungicides and herbicides products.
American antitrust regulators approved the deal on Tuesday, leaving it on track to close before July in line with management’s expectations.
The union is the second in a trio of politically-charged deals that will reshape the $100bn global agribusiness industry. The first is the $145bn merger of Dow Chemical and Dupont, approved last week, and the third is Bayer’s $66bn purchase of Monsanto.
The deals in the already-consolidated market have been controversial with farmers, consumer groups, and politicians.
At the same time, Brussels blocked HeidelbergCement and Schwenk’s takeover of Cemex Croatia as the companies failed to address the regulator’s concern that the deal would significantly reduce competition in grey cement markets and increased prices in Croatia.