WASHINGTON, April 4, 2017 – ChemChina’s $43 billion acquisition of Syngenta was approved Tuesday by the U.S. Federal Trade Commission, on the condition that ChemChina divest three of its generic pesticides – chlorothalonil, paraquat and abamectin. The European Commission, the EU’s governing body, approved the deal early Wednesday.
The proposed settlement approved 2-0 by the FTC “requires ChemChina to sell all rights and assets of (subsidiary) ADAMA’s U.S. paraquat, abamectin and chlorothalonil crop protection businesses to California-based agrochemical company AMVAC,” the FTC said in a news release.
The FTC said it will accept public comments on the proposed agreement until May 4.
“We are comfortable with the outcome and, most important, Syngenta will continue to provide a high quality, broad portfolio of products and solutions to U.S. farmers,” said Paul Minehart, a spokesman for the Switzerland-based chemical giant. Minehart said the FTC decision brings the number of approvals globally to 16. Still outstanding, he said, are China, India and Mexico.
In a release, Syngenta said EC's approval “represents a major step” towards the closing of the deal, which is expected in the second quarter of 2017. “The ChemChina-Syngenta transaction will ensure continued choice and ongoing innovation for growers in Europe and around the world,” Syngenta said.
Paraquat is a herbicide “used to clear fields prior to the growing season,” the FTC said. Abamectin is an insecticide mainly used to protect citrus and tree nut crops by killing mites, psyllid, and leafminers, and chlorothalonil is a fungicide “used mainly to protect peanuts and potatoes.”
Syngenta owns the branded versions of each of the three products and ChemChina’s Israeli subsidiary, ADAMA, markets the generic versions. The FTC said that without the ordered divestiture, the combined companies would have more than 60 percent of the market for paraquat, nearly 80 percent of the market for abamectin, and more than 40 percent of the market for chlorothalonil.
“AMVAC is well positioned to replace the competition that will be eliminated as a result of the proposed acquisition,” the FTC said in an analysis issued to aid public comment. “It has the industry experience, reputation, and resources to replace ADAMA as an effective competitor in the U.S. markets for formulated crop protection products based on paraquat, abamectin, and chlorothalonil.”
Headquartered in Newport Beach, California, AMVAC “has four separate manufacturing facilities within the U.S.,” the FTC said. “AMVAC is an experienced player in the agrochemical segments in which ADAMA and Syngenta operate, and sells to the same customer base.”
The FTC announcement follows by a few days the announcement that DuPont is selling off part of its global crop protection business to FMC Corp., in order to meet conditions set by the European Commission when it approved the Dow-DuPont merger.
(UPDATED to reflect EU approval of the merger on April 5.)
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