European Union antitrust regulators opened an in-depth investigation into state-owned Chinese chemicals group ChemChina’s $43 billion(£35.42 billion) bid for Swiss pesticides and seeds group Syngenta, China’s biggest-ever foreign acquisition.
Syngenta’s shares plunged over 9 percent after the European Commission said the companies had not allayed its concerns over the deal, raising the prospect of a longer investigation.
The Commission said the merger could harm competition as Syngenta and ChemChina, through its agrichemical subsidiary Adama Agricultural Solutions, had overlapping portfolios in the production of crop protection products like herbicides, insecticides, fungicides and plant growth regulators.
“This deal would lead to the combination of a leading crop protection company with one of its main generic competitors. Therefore we need to carefully assess whether the proposed merger would lead to higher prices or a reduced choice for farmers,” said Margrethe Vestager, EU Competition Commissioner.
The Commission will decide by March 15 whether to approve the deal.Clinching the deal is taking longer than planned amid a flurry of deals in the agriculture sector that Syngenta, the world’s biggest pesticides maker, said had swamped competition watchdogs.
ChemChina submitted a proposal to the Commission in September, including a plan to divest some $20 million worth of assets from Adama Agricultural Solutions.