China National Chemical Corporation and Swiss global agricultural company Syngenta AG have agreed to divest three products to gain approval from US antitrust regulators.
And earlier today, the European Commission has also approved the proposed acquisition subject to the divestiture of ChemChina’s European pesticide and plant growth regulator business.
The US Federal Trade Commission (FTC) had previously said the US$43 billion (£34.4 billion) merger would harm competition in several US markets.
In order to get the preliminary green light from the FTC, the companies have agreed to divest ChemChina’s production of the herbicide paraquat, the insecticide abamectin, which is used for citrus and tree nuts, as well as the potato crop fungicide chlorothalonil.
According to a FTC release, the proposed settlement requires ChemChina to sell all rights and assets of ADAMA’s U.S. paraquat, abamectin and chlorothalonil crop protection businesses to California-based agrochemical company AMVAC.
Originally the proposed deal created antitrust issues for the FTC.
“Without the proposed divestiture, the merger would eliminate the direct competition that exists today between ChemChina generics subsidiary ADAMA and Syngenta’s branded products,” the FTC said.
The US federal agency also says how competition enforcement agencies from around the world reviewed this transaction, including antitrust agencies in Australia, Canada, India, Mexico and the EU.
Meanwhile, ChemChina and Syngenta say getting FTC and European Commission approval represents a “major step forward” in the deal which is expected to take place in the second quarter of 2017.
“The ChemChina-Syngenta transaction will ensure continued choice and ongoing innovation for growers in the USA and around the world,” says a statement.
The FTC will make a final decision in 30 days.
“It is important for European farmers and ultimately consumers that there will be effective competition in pesticide markets, also after ChemChina’s acquisition of Syngenta,” says Commissioner Margrethe Vestager, in charge of competition policy.
“ChemChina has offered significant remedies, which fully address our competition concerns. This has allowed us to approve the transaction.”