State-owned China National Chemical Corp's (ChemChina) proposed $43-billion acquisition of Swiss chemical company Syngenta AG is close to being conditionally approved by the European Union regulator, Reuters yesterday reported, citing two people familiar with the matter.
Five months after the Committee on Foreign Investment in the US, cleared the transaction unconditionally.
ChemChina has agreed to minor concessions in order to allay the European Commission's (EC) concerns that the proposed acquisition of the world's largest pesticides maker may lead to higher prices and fewer choices for farmers.
The EC had in October last year launched an in-depth review into the merger and had said at that time that Syngenta and ChemChina-controlled Israeli generic pesticides maker Adama Agricultural Solutions Ltd, had "strong overlapping portfolios" of crop-protection products such as herbicides and insecticides.
ChemChina will divest a couple of national product registrations, including existing products and a few in the pipeline, in more than a dozen EU countries, the report said.
The products offered in the concessions are some of Adama's and also a few are from Syngenta, the report added.
In April 2016, ChemChina struck a friendly $43-billion deal with Syngenta in a bid to become the world's biggest supplier of pesticides and agrochemicals.
If successful, the deal will be the biggest overseas acquisition by a Chinese company, surpassing the 2008 purchase of China Netcom Group by China Unicom Hong Kong Ltd for $29 billion.
ChemChina's offer had come eight months after Syngenta spurned a $45-billion unsolicited takeover offer from US rival Monsanto Co, saying that the offer undervalued the company and posed execution risks.
Syngenta, which has annual revenues of $15.3 billion, was formed through the 2000 merger of Novartis Agribusiness and Zeneca Agrochemicals and has since grown through 13 acquisitions.
It is the world's largest crop chemical producer, and the third-largest in seeds and biotechnology by sales.
The company deals in herbicides, insecticides and fungicides for crop protection, field crops, vegetables and flower seeds, seed-care products and turf, garden, home care and public health products.
Listed on the Swiss and New York stock exchanges, Syngenta employs over 28,000 people in over 90 countries and has 12 production facilities across Switzerland, the US, the UK, Brazil, India, France and China.
Its main competitors are Monsanto Company, BASF, Dow AgroSciences, Bayer CropScience and DuPont Pioneer.
For ChemChina, the Syngenta transaction would be the biggest overseas acquisition after it purchased Italian tyre maker Pirelli in August 2015 in a $7.7-billion deal.
ChemChina was created in 2005 by putting together several chemical firms under China's erstwhile ministry of chemical industry and grew into a $36.5-billion business with 140,000 employees under chief executive Aye Ren Jianxin, a former communist youth league leader.
