China approves ChemChina-Syngenta acquisition
China National Chemical Corp.’s (ChemChina) and Syngenta continues to receive approval to the proposed acquisition. The Ministry of Commerce of the People’s Republic of China (MOFCOM) gave its authorization on April 12, just two days after the Federal de Competencia Económica in Mexico (COFECE) gave the merger a go-ahead as well.
The merger also was recently cleared by the European Commission during an in-depth review of the transaction. The Commission had concerns that the transaction as originally configured would have reduced competition in a number of existing markets for pesticides. Furthermore, the Commission had concerns that the transaction would reduce competition for plant growth regulators. The Commission's investigation focused on competition for existing pesticides, since ChemChina does not compete with Syngenta for the development of new and innovative pesticides.
Both companies expect the deal to close in the second quarter of 2017.
The deal was first announced in February 2016 and initially was expected to close by the end of 2016. It has faced some hurdles in the various countries that must give approval. In late February, ChemChina extended its $43 billion offer for Syngenta to April 28 as it seeks to gain regulatory approvals.
ChemChina has production, research and development, and marketing systems in 150 countries and regions. It is the largest chemical corporation in China, and occupies the 265th position among the Fortune 500. The company’s main businesses include materials science, life science, high-end manufacturing and basic chemicals, among others. Previously, ChemChina has successfully acquired nine industrial companies in France, the U.K., Israel, Italy and Germany.