US and EU regulators have this week approved the massive sale of agribusiness firm Syngenta to a Chinese company.
In a purchase worth $43bn, Chinese company ChemChina would completely acquire Syngenta, in the largest cross-border deal involving China to date.
Syngenta, a Swiss-based company, markets a wide variety of genetically modified seeds, as well as pesticides and herbicides.
On Tuesday US regulators gave the deal the go-ahead, with the US Federal Trade Commission not finding any prohibitive antitrust measures.
Then, on Wednesday, EU regulators also cleared the deal, albeit with a number of caveats pertaining to competition.
Specifically, the approval rested upon the divestment of some of ChemChina’s European plant growth and pesticides businesses.
“It is important for European farmers and ultimately consumers that there will be effective competition in pesticide markets, also after ChemChina’s acquisition of Syngenta,” said EU Commissioner Margrethe Vestager.
“ChemChina has offered significant remedies, which fully address our competition concerns.”
While the deal still requires Chinese regulatory approval, this is unlikely to be a problem, given the multi-billion dollar deal involves a state-run bank.
Agribusiness rapidly consolidating
The purchase of Syngenta is just one of three massive deals which represent an unprecedented consolidation of the agribusiness market.
The largest of these, a $140bn merger of Dow Chemical and DuPont was approved by the EU last week, however still requires approval in several other markets, including the US.
As well Bayer is awaiting approval for its $66bn acquisition of Monsanto, a company often the target of anti-GMO activism.
Regulators are concerned that this consolidation in the industry would give an ever-smaller number of companies a massive amount of power to control the world’s food supplies. As such, much effort is being put into preserving competition and creating a space for smaller players.
