Washington | Reuters — The China National Chemical Corp., or ChemChina, has won U.S. antitrust approval to buy Switzerland’s Syngenta on condition that it divest three pesticides, the Federal Trade Commission said on Tuesday.
To win approval for the $43 billion deal, the companies agreed to divest ChemChina’s generic production of the herbicide paraquat, the insecticide abamectin used for citrus and tree nuts and the fungicide chlorothalonil, used for peanut and potato crops (all figures US$).
The settlement with the FTC calls for ChemChina’s Adama arm to sell its U.S. paraquat, abamectin and chlorothalonil businesses to California-based chemical firm Amvac.
Adama doesn’t market products with any of the three active ingredients in Canada, where Syngenta holds active registrations on all three.
Canada’s antitrust watchdog, the Competition Bureau, in February issued a “no action” letter on ChemChina’s Syngenta takeover, saying a deal was “unlikely to result in a substantial lessening or prevention of competition” in the Canadian pesticide market.
Syngenta had $13.4 billion in sales in the U.S. in 2015, according to a report the company put out last year.
The deal was prompted by China’s desire to use Syngenta’s portfolio of top-tier chemicals and patent-protected seeds to improve domestic agricultural output. The country is the world’s largest agricultural market.
The deal is one of several that is remaking the market for agricultural chemicals, seeds and fertilizers. The trend toward market consolidation has triggered fears among farmers that the pipeline for new herbicides and pesticides might slow.
The other deals in the sector are a $130 billion proposed merger of Dow Chemical and DuPont and Bayer’s plan to merge with Monsanto. On the fertilizer front, PotashCorp has announced plans to merge with Agrium.
— Diane Bartz is a Reuters correspondent covering antitrust issues from Washington, D.C. Includes files from AGCanada.com Network staff.