ChemChina and Switzerland's Syngenta (SYT) have won conditional approval from the European Commission for their $43 billion Wednesday, with the Swiss group saying the deal should now close within the next three months.
The Commission said the deal could go ahead if ChemChina divests "significant parts" of its European pesticide and plant growth regulator business. The approval follows approval from the U.S. Federal Trade Commission for the tie up on Tuesday.
"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," Competition Commissioner Margrethe Vestager said in a statement. "ChemChina has offered significant remedies, which fully address our competition concerns. This has allowed us to approve the transaction."
Syngenta shares were marked 1.23% higher in Zurich by 12:40 CET and were changing hands at Sfr452.60 each
The decision followed an in-depth review of the combination. The investigation showed that the parties would have held a high proportion of the pesticides market share.
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.
Adama is a close and important generic competitor of Syngenta in many of these markets.
The parties have agreed to sell a significant part of Adama's pesticide business and some of Syngenta's business in the same sector. They will also have to sell 29 of Adama's pesticides which are in development.
Adama will also have to part with much of its plant growth regulator business for cereals.
The Syngenta deal is one of four major agrochemical industry mergers U.S. regulators and their counterparts around the globe have been reviewing. Last week the European Commission approved Dow Chemical's (DOW) $130 billion acquisition of DuPont (DD) . Also pending are Bayer's (BAYRY) $66 billion bid for Monsanto (MON) , and the $36 billion merger of fertilizer makers Agrium (AGU) and Potash Corp. of Saskatchewan (POT) .
The EC's approval for the DuPont and Dow deal was conditioned upon DuPont divesting its Cereal Broadleaf Herbicides and Chewing Insecticides portfolios, its Crop Protection research and development pipeline and organization, excluding seed treatment, nematicides, and late-stage R&D programs.
Dow has also offered to sell its global Ethylene Acrylic Acid copolymers and ionomers business to SK Global Chemical Co. Ltd.
-William McConnell contributed to this report.