Syngenta sees no sale of ChemChina’s Adama to smooth merger

Syngenta being taken over by ChemChina, does not expect antitrust regulators to force the Chinese state-owned company to put its subsidiary Adama up for sale, Syngenta’s CEO said on Tuesday.

“Adama will not need to be sold. There will be some remedies in both the U.S. and the EU but I can’t speak to any details,” Erik Fyrwald told Reuters on the sidelines of the World Economic Forum in Davos.

Unveiling details about Syngenta’s future role within ChemChina for the first time, Fyrwald also said Israel-based Adama, a maker of generic versions of pesticides without patent protection, would not be folded into Syngenta, allowing the Swiss group to focus on biotech research in China and elsewhere.

The companies are working to finalize agreements with regulators in the U.S. and European Union about the US$43 billion takeover, which would be the largest outbound acquisition by a Chinese company.

Sources close to the matter told Reuters last week that ChemChina and Syngenta had proposed minor concessions to the EU’s competition watchdog, with one person saying it was unlikely Adama Agricultural Solutions would have to be divested.

The EU Commission recently extended its review of the deal to April 12 and Fyrwald said he was “highly optimistic that by that time, we’ll have made sufficient progress in the U.S. and EU to be going forward”.

Adama would continue to be managed separately because “we’re an R&D company and they’re a generic company. There are different business models”, he added.

Instead, Syngenta would drive an expansion of plant biotech research in China ahead of an expected easing of regulatory limits.

China has not yet permitted the cultivation of biotech food crops but its plan for science and technology to 2020, published last August, unveiled the country’s far-reaching ambitions in genetically engineered agriculture to secure food supplies.

“We will increase the research that we do in China both for China and for the world,” Fyrwald said, adding this would not come at the expense of Syngenta’s research efforts elsewhere.

Fyrwald suggested China could become a hub in the development of new gene editing procedures that refrain from using bits of genetic code from different species.

Under the conventional transgenic approach, a bacteria’s bug-killing ability has, for instance, been commonly used for many GMO crops.

Echoing a familiar campaign in the seeds industry to overcome consumer fears about genetically-modified foods which also exist in China, Fyrwald said new technologies such as CRISPR-Cas9 would instead draw on a plant’s existing genome.

“There are rapidly advancing technologies that would not be considered GMO, where you don’t have to bring genes from other organisms.”