On April 5, 2017, the EC approved China National Chemical Corporation’s (“ChemChina”) proposed acquisition of Syngenta AG (“Syngenta). The approval is conditional on the divestiture of significant parts of ChemChina’s European pesticide and plant growth regulator business.
Syngenta is the leading pesticide supplier worldwide. ChemChina is currently active in pesticide markets in Europe through Adama, its wholly-owned Israel-based subsidiary. Unlike Syngenta, which produces pesticides based on active ingredients it has developed itself, Adama only produces generic pesticides based on active ingredients developed by third parties for which the patent has expired. Adama is the world’s largest producer of such generic pesticides.
The EC had concerns that the transaction as notified would have reduced competition in a number of existing markets for pesticides. Furthermore, it had concerns that the transaction would reduce competition for plant growth regulators. The EC’s investigation focused on competition for existing pesticides, since ChemChina does not compete with Syngenta for the development of new and innovative pesticides.