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ChemChina wins U.S. approval for Syngenta takeoverChemChina wins U.S. approval for Syngenta takeover

FTC requires Syngenta to divest three types of pesticides to avoid anti-competitive issues.

Jacqui Fatka

April 5, 2017

2 Min Read
ChemChina wins U.S. approval for Syngenta takeover

The Federal Trade Commission (FTC) has given its stamp of approval for China National Chemical Corp.'s (ChemChina) $43 billion purchase of Swiss global agricultural company Syngenta AG. The approval brings the merger one step closer to the finish line, which is anticipated by late June.

The two companies have agreed to divest three types of pesticides so that the proposed merger would not harm competition in several U.S. markets.

According to a complaint filed by FTC, the merger, as originally proposed, is likely to cause significant competitive harm in the U.S. markets for three pesticides:

* The herbicide paraquat, which is used to clear fields prior to the growing season;

* The insecticide abamectin, which protects primarily citrus and tree nut crops by killing mites, psyllid and leafminers, and

* The fungicide chlorothalonil, which is used mainly to protect peanuts and potatoes.

Syngenta owns the branded version of each of the three products at issue, giving it significant market shares in the U.S. ChemChina subsidiary ADAMA focuses on generic pesticides and is either the first- or second-largest generic supplier in the U.S. for each of these products.

FTC alleges that 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 merger would also increase the likelihood that U.S. customers buying paraquat, abamectin and chlorothalonil would be forced to pay higher prices or accept reduced service for these products, the complaint states.

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.

Both the U.S. and the European Union took a close look at the deal, with the European Commission opening its own investigation last year. It found that the transaction might lead to higher prices and reduced choice for crop protection products sold to farmers. The EU has an April 18 deadline to end its review.

The agreement will be subject to public comment for 30 days, beginning April 4 and continuing through May 4, 2017, after which FTC will decide whether to make the proposed consent order final.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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