Chinese state-owned chemicals company ChemChina is ready to offer more concessions to win European Union anti-trust approval for its $43 billion bid for Swiss pesticide and seed group Syngenta AG, a source with direct knowledge of the process said.
Shares in Syngenta (SYT) dived more than 9% on Monday after a European Commission spokesman said the companies had not offered concessions to get the deal through, raising concerns about the likelihood of a longer, full investigation from the the EU’s competition watchdog.
ChemChina submitted a proposal to the European Commission in September, including a plan to divest some $20 million worth of assets from its agrichemical subsidiary Adama Agricultural Solutions, the Beijing-based source told Reuters.
But those divestment plans were seen inadequate by the commission, which raised “a more detailed menu of possible remedies” during last week’s meeting with companies, said the source, who declined to be identified because he was not authorized to speak to the media.
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ChemChina is ready to fully cooperate with the European Commission and come up with a remedy plan that can satisfy the approvers, the source added.
A ChemChina spokesman was not immediately available for comment.
Syngenta said earlier on Tuesday that regulators in EU and elsewhere have requested a large amount of additional information and the firm now expected the regulatory process to extend into the first quarter of 2017.
Syngenta said it remained confident it would win the approvals.
Regulatory scrutiny over the ChemChina-Syngenta deal, China’s largest-ever overseas acquisition, comes at a time the global agricultural chemicals industry is seeing a wave of consolidation as companies bulk up to better compete with each other.