ChemChina, Syngenta submit remedy proposals to EU antitrust watchdog
Reuters
Published Jan 10, 2017 05:13AM ET
ChemChina, Syngenta submit remedy proposals to EU antitrust watchdog
By Chen Aizhu and Michelle Price
BEIJING/HONG KONG (Reuters) - China National Chemical Corp (ChemChina) [CNNCC.UL] and Swiss pesticides and seeds group Syngenta AG (S:SYNN) have proposed remedies to the European Union's competition watchdog to address concerns over their $43 billion merger agreement.
The European Commission's website showed "commitments" submitted on Jan. 9, which typically means the parties have proposed remedies such as asset divestment or specific product pricing. It did not elaborate on the nature of the pair's commitments.
"Syngenta confirms that remedies related to the deal with ChemChina have been submitted to the EC. We will not comment further on that," a Syngenta spokesman said. "ChemChina and Syngenta remain fully committed to the transaction and are confident of its closure."
A spokesman for state-owned ChemChina told Reuters details of the remedy proposals were confidential.
The Commission began investigating ChemChina's takeover of Syngenta in October, saying they had not allayed concerns about potentially unfair competitive advantages. The deal has already been approved by regulators in several markets, including by a U.S. national security panel and Australia's competition watchdog.
The Commission's concerns are widely seen as one of the last major regulatory hurdles, with U.S. antitrust approval also pending.
Syngenta said last week the Commission had agreed to extend its review of the deal by 10 working days to April 12 to allow "sufficient time for the discussion of remedy proposals".
In its October statement, the Commission highlighted ChemChina subsidiary Adama Agricultural Solutions Ltd (N:ADAM) as one area where ChemChina and Syngenta had an overlapping portfolio of European crop protection products, including herbicide and insecticide. A merger could therefore potentially reduce competition for such products.
Israel-based Adama makes generic crop protection and pest control products. It is the largest supplier of generic crop protection products in Europe, according to the Commission.
Ioannis Kokkoris, Chair in Law and Economics at Queen Mary University of London, said divesting Adama was the simplest and cleanest means for ChemChina to address competition concerns.
"That ChemChina has not done this yet suggests it is trying to mitigate a full divestment of Adama, such as by selling a number of significant activities," said Kokkoris. "The other scenario is that it has agreed to divest Adama and is now discussing top-up remedies."
These could include commitments to continue funding research in certain products to ensure the deal does not adversely affect innovation in product development, he said.
Get The News You Want
The Commission's next step would be to test the proposed remedies against its market model, Kokkoris said.
"The companies have identified a list of products that may have caused the Commission's concerns in respective countries," a senior Beijing-based industry executive with knowledge of the talks told Reuters last week.
"Although the progress has taken slightly longer than expected, communication with the Commission has been smooth," said the executive, who was not authorized to speak publicly on the matter and so declined to be identified.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.