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ChemChina said to plan to move new assets to Adama post-Syngentaqrcode

Apr. 12, 2017

Favorites Print Apr. 12, 2017
China National Chemical Corp. plans to redistribute agrochemical assets to its Adama unit after the $43 billion takeover of Syngenta AG to compensate the business for antitrust-related disposals, according to people with knowledge of the situation.

Adama Agricultural Solutions Ltd. is expected to strengthen its slew of crop-protection products with better technology from ChemChina after the deal is completed, said the people, who asked not to be identified because details haven’t been made public. The Israeli chemical firm can use new technology to neutralize the impact of asset sales when its parent buys the world’s largest maker of pesticides, the people said.

Adama and Syngenta are planning to sell a package of European assets to remove overlaps in specific markets, said the people. While there’s widespread interest for these products in the industry, the sellers aim to find a buyer that can maintain competition levels, the people said. No plants or fixed assets will be included, they said. Preparations for the sale will begin in the coming weeks or months, they said.

Representatives for Adama and Syngenta declined to comment. ChemChina didn’t immediately respond to an email or answer a phone call seeking comment.

More than a year in the making, ChemChina’s planned takeover of Syngenta is nearing completion. Antitrust regulators around the globe are closely watching planned transactions in crop chemicals and seeds as the top five suppliers pursue combinations. Deals include Dow Chemical Co.’s combination with DuPont Co., and Bayer AG’s planned purchase of Monsanto Co. ChemChina-Syngenta is poised to be the first of these deals over the line with completion expected in the second quarter.

American Vanguard Corp. on April 5 agreed to buy a small part of Adama’s operations in the U.S., which were put up for sale to comply with Federal Trade Commission demands. Financial terms weren’t disclosed. SunTrust Robinson Humphrey Inc. analyst James Sheehan estimated the assets generate annual revenue of $20 million to $25 million.

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Source: Bloomberg

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