ChemChina's USD44 billion Acquisition of Syngenta Faces Closer EU Scrutiny
Yicai Global
/SOURCE : Yicai
ChemChina's USD44 billion Acquisition of Syngenta Faces Closer EU Scrutiny

(Yicai Global) Nov. 4 -- The acquisition of Syngenta, a Swiss agribusiness group, by China National Chemical Engineering Group Corporation, will face more stringent reviews from the European Union, which may require ChemChina to make more concessions to antitrust legislation.

"The EU does not specifically rule against China in conducting such a review, as any large-scale merger or acquisition will be subject to an antitrust probe. It's quite likely that the deal will be reached, for I have not seen any obvious objections on this deal in the European community. This deal differs from Bayer's acquisition of Monsanto, as the latter also involves the Europe's attitude towards transgenosis." Bernhard Url, executive director of the European Food Safety Authority said, during an exclusive interview with Yicai Global in Shanghai on Nov. 3.

A ChemChina-Syngenta behemoth would control 30 percent of European pesticidal crop control, which unsurprisingly has drawn the attention of legislators worried about an agribusiness monopoly.

Both Germany and the EU have become more prudent in their review of acquisitions, particularly in the agrochemical field. Perhaps EU regulators have yet to recognize the model of spinning off a subsidiary as a concession to antitrust laws following a merger. Both companies may need to compromise in the following several months, Chen Jizheng, vice president of mergers and acquisitions at CITIC Securities said.

ChemChina's acquisition of Syngenta was postponed at the end of last month due to regulatory concerns. At the same time, the merger between Dow Chemical Co and DuPont Co to form DowDuPont, and Bayer's proposed acquisition of Monsanto for USD66 billion are also under close review by the EU.

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