The ChemChina and Syngenta merger is edging closer with approval from US antitrust regulators who have signaled preliminary go-ahead for the US$43 billion deal on the condition that three products are divested to allay competition concerns.

In a statement from both companies, ChemChina and Syngenta announce that they have received approval from the US Federal Trade Commission (FTC) for the proposed acquisition of Swiss giants Syngenta by ChemChina.

“This represents a major step towards the closing of the transaction, which is expected to take place in the second quarter of 2017,” it says.

“The ChemChina-Syngenta transaction will ensure continued choice and ongoing innovation for growers in the USA and around the world.”

However, the Federal Commission (FTC) has some conditions including the herbicide paraquat, which is used to clear fields prior to the growing season; the insecticide abamectin, which protects primarily citrus and tree nut crops by killing mites, psyllid, and leafminers; and the fungicide chlorothalonil, which is used mainly to protect peanuts and potatoes.

“Syngenta owns the branded version of each of the three products at issue, giving it significant market shares in the United States. ChemChina subsidiary ADAMA focuses on generic pesticides and is either the first- or second-largest generic supplier in the United States for each of these products,” says the FTC.

“The complaint alleges that without the proposed divestiture, the merger would eliminate the direct competition that exists today between ChemChina generics subsidiary ADAMA and Syngenta’s branded products. The merger would also increase the likelihood that U.S. customers buying paraquat, abamectin, and chlorothalonil would be forced to pay higher prices or accept reduced service for these products, the complaint states,” it adds.

The FTCs settlement is subject to public comment for 30 days after which it will make a final decision.