ChemChina given go-ahead for Syngenta deal in EU
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ChemChina given go-ahead for Syngenta deal in EU

Chinese agrochemical giant ChemChina has won European Union (EU) antitrust approval for its takeover of Swiss company Syngenta. The deal was made for $43 billion, and will result in a truly huge agricultural vehicle, able to access economies of scale previously unheard of, and compete in a tougher agricultural environment.

The ChemChina deal is part of a spate of M&A activity amongst the world’s biggest agricultural companies. Dow Chemical Co. is merging with DuPont Co., and Bayer AG is hoping to gain EU clearance for its purchase of Monsanto Co. In short, 6 of the biggest agricultural companies on the planet will reform into 3 titans, vastly altering the agribusiness landscape in the process.

Syngenta has had a strong year-to-date

syngenta06 gph

SOURCE: Yahoo Finance

EU approval is, however, conditional. Regulators have called upon ChemChina to divest “a significant part” of its Adama unit’s pesticide business, as well as other related products. The EU’s statement read:

“In all product markets with problematic overlaps ChemChina will divest either Adama’s or Syngenta’s product. As a result, the commission has approved the transaction.”

U.S. antitrust authorities reached a similar conclusion the day before, and Chinese regulators are currently reviewing the deal. ChemChina and Syngenta expect to close the deal by the end of June, bringing us closer to a whole new world of agribusiness!

Disclosure

Dominion holds Syngenta in its Global Trends Managed Fund.


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