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ChemChina’s $43bn purchase of Syngenta cleared the two biggest remaining regulatory hurdles this week, opening the way for China’s largest cross-border acquisition to close by June.
The most challenging antitrust approvals were granted in quick succession, first by the US Federal Trade Commission on Tuesday and then by Margrethe Vestager, Europe’s antitrust watchdog, on Wednesday.
The state-owned Asian giant agreed to sell significant assets in Europe and some in the US to mitigate regulators’ concerns that the deal would reduce competition between Syngenta and Adama – the world’s biggest generic pesticides producer and a subsidiary of ChemChina .
“The EU and the US are the big regulatory approvals that we’re seeking,” said Erik Fyrwald, Syngenta CEO, in an interview last week in Brussels. He expected approval from both “in the coming weeks” and had “very high confidence” the deal would close by June.
Mr Fyrwald, who will remain chief executive once the deal is complete, said he has been assured by the Chinese group that financing is in place to close the deal, maintain the company’s investment-grade credit rating and fund “aggressive growth” for Syngenta in China.
Seventeen regulators have approved the sale and clearance is still pending – though expected – in India, Mexico and China. There are no significant overlaps in Mexico and India according to a person close to the company. Chinese approval is unlikely to be withheld for an SOE pursuing a landmark deal that furthers Beijing’s efforts to develop its own seeds and agrichemical industry.
The committee on foreign investment in the US approval, granted last August, was another major milestone.