EU Opens In-Depth Probe Into ChemChina's Bid for Syngenta

BRUSSELS—The European Union's antitrust watchdog on Friday said it opened an in-depth probe into plans by China National Chemical Corp. to acquire Syngenta AG to assess whether the deal would lower competition for crop protection products and the supply of some input chemicals.

The European Commission said the two companies, especially through ChemChina's Adama unit, have "strong overlapping portfolios" of crop protection products, such as herbicides and insecticides, and noted that the "transaction would take place in an industry that is already relatively consolidated." The commission set a deadline for March 15 to complete its review.

"We need to carefully assess whether the proposed merger would lead to higher prices or a reduced choice for farmers," said EU Antitrust Chief Margrethe Vestager.

The announcement was expected after Swiss seed and pesticide maker Syngenta said earlier this week that regulatory approval of its proposed acquisition by ChemChina is likely to be delayed into early 2017 as regulators seek more information amid a consolidation wave in the sector.

Syngenta's review comes as the EU is faced with a wave of large tie-ups in the sector, including plans by Bayer AG to acquire Monsanto Co. and plans by Dow Chemical Co. and DuPont Co. to first merge and then subsequently split in three.

The EU usually assesses mergers on a case-by-case basis and in the order in which they have been officially registered with the regulator. But the EU's antitrust chief, Margrethe Vestager, has previously signaled that her department's review of the deals would take into consideration the fact that several mergers in the agricultural sector were taking place at one time.

Syngenta this week said the announcement of the Bayer-Monsanto deal prompted more requests for information from regulators about their own deal with ChemChina.

Syngenta hasn't submitted remedies to the commission but earlier this week said if remedies were requested from European or U.S. regulators, the company would work with them to "resolve these as quickly as possible."

The EU said it was cooperating closely on the investigation into the deal with other competition authorities around the world, including those in the U.S., Brazil and Canada.

Write to Natalia Drozdiak at [e-mail]

(END) Dow Jones Newswires

October 28, 2016 13:05 ET (17:05 GMT)

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