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March 6, 2017

ChemChina says Syngenta deal filing accepted by Beijing

Source: Reuters

​By Chen Aizhu

BEIJING (Reuters) - ChemChina [CNNCC.UL] said on Monday that Beijing had accepted its application for regulatory approval of its $43 billion takeover of Syngenta last month.

China's Commerce Minister Gao Hucheng attends a session during the 2016 G20 Trade Ministers Meeting in Shanghai, China July 10, 2016. REUTERS/Aly Song

Earlier Gao Hucheng, who retired as commerce minister less than two weeks ago, said the government had not received a formal filing for China’s largest overseas acquisition.

Speaking to Reuters on the sidelines of parliament’s annual meeting, Gao also said the Ministry of Commerce (MOFCOM) would not start considering any submission until regulators in other countries had given the deal the green light.

Responding to the comments, ChemChina spokesman Ren Kan denied this, saying by phone the company had submitted the application and the ministry had accepted it.

A second company official who was not authorized to speak to press, said the ministry’s anti-trust bureau had accepted the application on Feb 9.  

It is not clear if Gao, who left his post and was replaced by his deputy on Feb 23, had not been briefed with the most up-to-date information.

Gao is now a senior member of a largely ceremonial but high-profile advisory body to parliament.

Press officials at the Ministry of Commerce were not immediately available for comment, while Syngenta did not immediately respond to a request for comment.

Gao’s comments come a month after Syngenta delayed the expected closure of the deal to the second quarter amid scrutiny from U.S. and European regulators.

His remarks will likely stir fresh speculation among Syngenta investors about the China regulatory process.

Mergermarket publication PaRR reported in January that ChemChina had previously filed and then withdrawn the filing, a strategy that is sometimes used to give merging parties more time for the deal to clear, or to address potential objections.

Last month, Syngenta Chief Executive Erik Fyrwald did not confirm if China’s Commerce Ministry had formally accepted a filing, but said he was confident the deal would win approval in the world’s top agricultural market, without any long delays.

The process has drawn intense interest from investors as Bayer’s acquisition of Monsanto and the merger of Dow Chemical and DuPont are being examined by regulators across the globe.

Mario Russo, an analyst at boutique investment bank NSBO said the deal created few overlaps outside Europe and he expected Chinese regulators to approve the deal, which is strategically important to China, once the U.S. and EU had officially cleared it.

However, investors had concerns over potential domestic political interference that could potentially slow the deal and wanted more transparency on the timetable, he added.

Additional reporting by Michelle Price; Writing by Josephine Mason; Editing by Christian Schmollinger/Tom Hogue/Alexander Smith

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