China National Chemical Corp (ChemChina) and Switzerland-based Syngenta AG have reportedly submitted ‘minor concessions’ to EU regulators to address concerns their US$43 billion merger may hinder competition.
News agency Reuters reported ‘one person close to the deal’ said it was ‘unlikely’ that ChemChina would have to sell its Adama Agricultural Solutions Ltd business, the largest supplier of general crop protections products in Europe.
Discussions were focusing on remedying concerns with respect to specific products, some of which Adama may own, according to Reuters.
The source reportedly said the overall divestments would be less than US$500 million.
“It’s about individual products where competition is scarce,” the source was quoted as saying, adding that some of these products were only worth tens of millions of dollars.
“Syngenta confirms that remedies related to the deal with ChemChina have been submitted to the EC [European Commission]. We will not comment further on that,” a Syngenta spokesman was quoted as saying.
“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 EC opened a Phase II investigation into the merger proposal in October, which involves an in-depth analysis of the merger’s effects on competition and lasts 90 working days with a possible extension of 20 working days. A decision is due on April 12.
“This deal would lead to the combination of a leading crop protection company with one of its main generic competitors,” Commissioner Margrethe Vestager, in charge of competition policy, said in October.
“Therefore we need to carefully assess whether the proposed merger would lead to higher prices or a reduced choice for farmers”.
The EC also said the companies “each have strong partially overlapping portfolios of crop protection products, including herbicides, insecticides, fungicides and plant growth regulators.”