Commissioner Margrethe Vestager, in charge of competition policy, said: "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. ChemChina has offered significant remedies, which fully address our competition concerns. This has allowed us to approve the transaction."
Today's decision follows an in-depth review of the transaction. 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. It is the world's biggest producer of such generic pesticides.
The Commission's competition concerns
The Commission had concerns that the transaction as notified would have reduced competition in a number of existing markets for pesticides. Furthermore, the Commission had concerns that the transaction would reduce competition for plant growth regulators. The Commission's investigation focused on competition for existing pesticides, since ChemChina does not compete with Syngenta for the development of new and innovative pesticides.
The Commission's investigation showed that the parties would have held high combined market shares for a number of pesticides and for certain plant growth regulators, with few other competitors remaining. Adama is a close and important generic competitor of Syngenta in many of these markets. In particular, the Commission found that the takeover would have significantly impeded effective competition in the following markets:
- Pesticides, namely
- fungicides for cereals, fruits, oilseed rape, and vegetables in a number of Member States;
- herbicides for cereals, corn, sunflower, and vegetables in a number of Member States;
- insecticides for cereals, corn, fruits, oilseed rape, and vegetables in a number of Member States;
- seed treatment products for cereals and sugar beet in a number of Member States; and
- Plant growth regulators for cereals in a number of Member States.
ChemChina offered a set of commitments, which address the Commission's competition concerns in full. In particular, they will divest:
- a significant part of Adama's existing pesticide business, notably fungicides for cereals, fruits and oilseed rape, herbicides for cereals, corn, sunflower and vegetables, insecticides for cereals, corn, fruits, oilseed rape, and vegetables and its seed treatment products for cereals and sugar beet;
- some of Syngenta's pesticides, notably fungicides for vegetables and herbicides for cereals, vegetables and sunflower;
- 29 of Adama's generic pesticides under development and access to third parties to studies and field trial results for these products;
- a significant part of Adama's plant growth regulator business for cereals; and
- all relevant intangible assets underpinning the divested pesticide and plant growth regulator products. They will also make available relevant personnel.
Source: European Commission