The European Union’s antitrust watchdog will launch an in-depth probe into China National Chemical’s plan to buy Syngenta to determine if the deal would lower competition for crop-protection products.
The investigation will focus on whether combining Swiss-based Syngenta, which sells about one-fifth of the world’s pesticides, with a ChemChina-owned company that supplies generic alternatives would leave farmers with higher chemical costs or fewer available products, according to the EU.
The move was expected after Syngenta signaled earlier this week that its sale would likely be delayed until early 2017. It reflects the level of scrutiny by antitrust authorities for farm-sector deals at a time when farmers in Europe and the US grapple with low grain prices following consecutive bumper crops that swelled global supplies.
The European Commission, the EU’s executive arm, said Friday that Syngenta and Adama Agricultural Solutions, an Israeli maker of generic pesticides that is controlled by ChemChina, had “strong overlapping portfolios” of crop-protection products such as herbicides and insecticides. 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.
Full Content: The Wall Street Journal