SYNGENTA (SYNN VX)
CADE recommends approval of Syngenta/ChemChina transaction – Our Thoughts on the next steps
On Friday (24/2), CADE announced that they recommend approval of the proposed Syngenta-ChemChina transaction without restrictions. Following CADE’s initial approval of the transaction, there is a 15 calendar day appeal period during which any interested party can object to the approval and ask CADE’s Administrative Tribunal for Economic Defense to analyse it. Therefore, the approval will not become final until 11 March following the lapsing of the appeal period.
The remaining 3 significant approvals are the EC (Phase II decision expected on 12 April), the US (second request received on 28 January) and MOFCOM. We remind that in our previous contact with Syngenta, the companies stressed that the receipt of the second request does not in any way delay the timeframe and the companies still expect to close the transaction in Q2. The companies still believe it is possible to receive the FTC approval prior to the expected EC approval on 12 April.
Syngenta IR reminded us that the parties have already submitted a package of remedies to the FTC and the EC. We believe that MOFCOM will be the last regulatory authority to rubber-stamp the deal and believe that all approvals could be in place by the end of May as we initially had Brazil as a potentially gating item given their statutory 240 day initial review period.
We think that todays’ news and the confirmation by the IR that they have already submitted remedies to both EC and FTC make the spread extremely compelling. We think that the current level is at 79% deal probability is still too wide.