Could ChemChina-Sinochem Merger Face Heightened Antitrust Scrutiny?
January 7, 2020 Over the weekend, Syngenta Media Relations sent out a press release announcing that Chen Lichtenstein, current President/CEO of ADAMA, will become the new CFO of Syngenta. One part of this notice included this sentence: “ChemChina and Sinochem announced that they are consolidating their agricultural assets into a new holding company that will be called Syngenta Group.”
And with that, the long-rumored merger of two of China’s largest crop protection/seed/fertilizer companies has become a reality. According to observers, the new business entity will have sales of more than $100 billion and be listed on the Chinese technology-focused STAR market by mid-year.
For those in the agricultural market, this combination of ChemChina and Sinochem probably comes as no surprise. Indeed, back in summer 2018, many people were already speculating such a deal was in the works as Sinochem executives began populating the ChemChina board of directors (although both companies denied that this was the case at the time).
“If this Sinochem move had happened when ChemChina was about to acquire Syngenta, several antitrust authorities said that they would have had to re-evaluate the position of the acquisition of Syngenta,” said V.M. (Jim) DeLisi, Owner of Fanwood Chemical, speaking at the 2018 AgriBusiness Global Trade Summit in Phoenix, AZ. “The thing that I find very troubling here is, under any other normal circumstances, there would need to be applications being submitted to antitrust authorities in the U.S., Brazil, India, Japan, and the European Union. So far, there is no indication that that is being looked at at all.”
Loading ...At this point, it appears that DeLisi’s fear of no country oversight regarding the Sinochem/ChemChina merger will be looked for by the respective companies involved. However, it will be interesting to see how some of these regulatory bodies might respond to the now public news over the next few months . . .
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