European commission investigates competition concerns in agricultural megamerger
The European commission has opened an in-depth investigation to determine whether ChemChina’s proposed acquisition of Syngenta raises competition concerns. ‘This deal would lead to the combination of a leading crop protection company with one of its main generic competitors. Therefore we need to carefully assess whether [this] would lead to higher prices or reduced choice for farmers,’ said Commissioner Margrethe Vestager, who is in charge of competition policy.
The commission is concerned that Syngenta and ChemChina, through its European subsidiary Adama, have overlapping and competing crop protection product portfolios, including herbicides, insecticides, fungicides and plant growth regulators.
The investigation will also verify whether the merger may negatively affect supplies of active ingredients. These are the key chemical input for other manufacturers to make crop protection products. The commission must reach its decision by 15 March, 2017.
Syngenta notes that the transaction has been approved by the US Committee on Foreign Investment, and by 11 competition authorities around the world. ‘The companies intend to continue constructive discussions with the EU authorities to conclude the review as early as possible,’ Syngenta said in a statement. ‘ChemChina and Syngenta remain entirely committed to this transaction and are confident of its completion.’