ChemChina’s Syngenta Buyout Approved but 3 Pesticides Booked to Go – DTN

    The Federal Trade Commission told ChemChina on Tuesday that the agency approves ChemChina’s $43 billion purchase of Syngenta AG, but will require ChemChina to sell the assets and licensing of 3 specific pesticides.  

    After the FTC approved the deal on Tuesday, the European Union approved the deal with similar conditions on Wednesday.

    Syngenta issued a pair of nearly identical statements to the regulatory approvals calling the actions as major steps toward closing the deal, which should happen by mid-year.

    “The ChemChina-Syngenta transaction will ensure continued choice and ongoing innovation for growers in the USA and around the world,” Syngenta stated.

    Syngenta did not address the divestiture requirements handed down by the U.S. and Europe.

    In a news release, the FTC stated ChemChina and Syngenta AG had agreed to divest the 3 pesticides to settle FTC charges that their merger would harm competition in the pesticides sector in several U.S. markets.

    The three pesticides are:
    Paraquat, a herbicide used mainly as a burn-down herbicide before the growing season.
    Abamectin, an insecticide used mainly in citrus and fruit tree crops to kill mites, phyllid and leafminers.
    Chlorothalonil, a fungicide used mainly on peanuts and potatoes

    The FTC stated Syngenta owns the branded version of each product, “giving it significant market shares in the United States.” ChemChina’s subsidiary ADAMA owns generic versions of the same products and is either the largest or second-largest seller of those products in the U.S.

    ChemChina and Syngenta did not immediately release statements on the FTC announcement Tuesday.

    Without selling off the pesticides, the two companies combined would have more than 60% of the paraquat market in the U.S., and they would have over 80% of the abamectin market. The two would combine for more than 40% of the chlorothalonil market as well.

    Under the consent decree between the companies and the FTC, the commission proposes ChemChina sell the assets and rights for all 3 pesticides to the California-based company AMVAC. The FTC stated AMVAC “is well positioned to replace the competition that will be eliminated as a result of the proposed acquisition.” The FTC added that AMVAC currently competes with both Syngenta and ADAMA in many of the same product lines. Still, the FTC indicated that ChemChina could find another approved company to buy the pesticide lines.

    The FTC added that the commission also worked with other regulatory agencies around the world to deal with the anti-trust issues in the merger. Those countries included Australia, Canada, the European Union, India, and Mexico.

    The approval by the FTC is a key step in completing the merger. The U.S national security committee that looks into foreign ownership of key U.S. assets approved the merger last summer.

    The $43 billion deal last year by the state-owned ChemChina was labeled as the largest foreign purchase by a Chinese corporation.

    Just a day after the U.S. approved the merger, the European Commission approved the purchase of the Swiss-based Syngenta. The EU also had concerns about competition in the pesticide industry, as well as plant growth regulators. To deal with those concerns, ChemChina agreed to divest a significant part of ADAMA’s businesses in Europe. Syngenta will also divest some of its pesticides in Europe as well.

    FTC news release:…

    EU news release:…

    Chris Clayton can be reached at

    Follow him on Twitter @ChrisClaytonDTN

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