ChemChina's acquisition of Syngenta likely to be delayed until 2017

Syngenta AG said Tuesday that regulatory approval of its proposed acquisition by ChemChina is likely to be delayed into early 2017 as regulators seek more information amid a consolidation wave in the sector.

"In a context of industry consolidation, regulators in the [European Union] and elsewhere have recently requested a large amount of additional information, and we now expect the regulatory process to extend into the first quarter of 2017," Syngenta said. "ChemChina and Syngenta remain fully committed to the transaction and are confident of its closure."

Previously, the company had expected the deal with China National Chemical Corp.-ChemChina's formal name-to close by the end of this year.

Syngenta also reported third-quarter sales of $2.5 billion, down 3% from $2.62 billion during the same period in 2015 and broadly in line with analyst expectations. Sales growth was led by the U.S., Asia and, to a lesser extent, Europe which offset weakness in Latin America.

In February, Syngenta agreed to be acquired by ChemChina for $43 billion in cash.

On Monday, an EU official said Syngenta and ChemChina hadn't submitted proposed remedies to resolve potential antitrust concerns related to their planned merger by last Friday's deadline. This led to a nearly 6% slide in Syngenta shares Monday as investors questioned the timing of the deal's approval.


In an interview Tuesday, Syngenta Chief Executive Erik Fyrwald said that the announcement in September of the proposed acquisition of Monsanto Co. by Bayer AG-which would create the world's largest seed and pesticide business-prompted more requests for information "than we'd ever seen before" from regulators regarding the Syngenta and ChemChina deal.

Syngenta received data requests on crop, geography and active ingredients, said Mr. Fyrwald. He said the companies didn't meet last Friday's deadline because European regulators weren't ready to provide feedback on the types of remedies they might seek.

Mr. Fyrwald expects the EU review to enter a Phase II process at the end of this month, which can last 90 working days. "Regulators are absolutely right to do their jobs," he said.

Still, Syngenta remains confident the deal with close.

"Given our deal has such minimal overlap, if there are to be some remedies requested we would work with EU and [U.S. Federal Trade Commission] to resolve these as quickly as possible," Mr. Fyrwald said.