EU gives green light for Novartis agribusiness deal
The European Commission has given the go-ahead for Switzerland's Novartis and British-Swedish group, AstraZeneca, to merge their agribusiness divisions. However, the SFr22.5 billion deal depends on both companies selling off some key businesses.
The European Union's antitrust watchdog said its approval, which followed a four-month probe, was "subject to a number of divestments offered by the companies to address concerns about the creation or strengthening of dominant positions..."
The Commission is concerned that the new company, to be called Syngenta, will be in a position to monopolise some "39 markets for crop protection products, including cereal fungicides and maize herbicides".
The Commission said the divestments proposed by the two companies represented total worldwide sales of more than SFr375 million this year, and a potential SFr750 million in the near future, mainly in Europe.
Among the key concessions, the companies offered to sell off Novartis' new strobilurin cereal products along with AstraZeneca's older generation product flutriafol.
To address potential competition problems in the European maize herbicide market, they also offered to divest themselves of their businesses based on sulcotione and acetochlor.
AstraZeneca and Novartis said a in a joint statement that the disposal represents less than five per cent of Syngenta's sales, and that the EU's demands were broadly as they had expected.
The two groups remain confident that Syngenta will be launched some time during the fourth quarter of this year. It will be the world's largest crop protection company and third largest in seeds.
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