|Girish Shetti |||Apr 06, 2017 02:23 AM EDT|
(Photo : Getty Images. ) ChemChina – Syngenta $ 43 deal finally got an approval by EU ant-trust regulators, after Chemchina agreed to sell substantial parts of its European businesses.
China's state owned chemical giant ChemChina on Wednesday crossed the major hurdle in its quest of the $ 43 billion takeover of the Syngenta AG, after the high profile deal got the nod from European Union regulators. The crucial nod would pave way for the biggest foreign acquisition by any Chinese company till date and also China's long awaited quest to control the global food supply chain.
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The much sought after deal was blocked last year by EU regulators, after claiming that the merger would give both companies unfair advantage in the European market. However, this issue has now been sorted out, following ChemChina's decision to sell substantial parts of its European businesses that make pesticides and substances to stimulate slow plant growth.
"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 Margrethe Vestager, the European Union commissioner in charge of competition policy.
Margrethe expressed complete satisfaction over the fact that the current remedy offered by ChemChina is good enough to address their competition concerns.
ChemChina was also forced to sell its subsidiary business in the American market to gain the approval of Federal Trade Commission (FTC), which came exactly a day before the EU regulators gave a go ahead to the deal.
However, the market was more or less confident about securing U.S. FTC's approval, since the high profile deal was sanctioned by the U.S. anti-trust regulators last year itself.
After securing green signals from U.S. and EU, ChemChina - Syngenta has probably crossed all the major hurdles in the two most important markets. However, the deal is awaiting final clearance in some other key markets including India, Mexico and China. But analysts are confident that the deal will pass all the hurdles in these markets.
China's chemical giant's acquisition of Syngenta represents flurry of consolidation in the global agricultural chemical industry, as companies across the sector are trying to cope with challenge of falling crop prices.
Dow Chemical's $140bn merger with DuPont and Bayer's $66bn purchase of Monsanto is expected to shake up the global agricultural industry. Dow Chemical - DuPont deal got conditional clearance by EU regulators last week.
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