AstraZeneca and Novartis announced today that the European Commission (EC) has cleared the planned merger of the Zeneca Agrochemicals business with the Novartis Agribusiness to form Syngenta AG, the world's first global dedicated agribusiness company. 

The approval follows the agreement of AstraZeneca and Novartis to divest or license some of their crop protection products. The disposals are as broad as anticipated by the parties at the time they announced the proposed transaction in December 1999 and in aggregate represent less than 5 percent of Syngenta's unaudited pro forma 1999 sales. 

Dr. Tom McKillop, Chief Executive Officer of AstraZeneca, said: "This is good news and is another important milestone successfully passed in our intention to spin off the Zeneca agrochemicals business. The plan to launch Syngenta in the final quarter of this year remains firmly on track.'' 

Zeneca Agrochemicals has already announced, in June, its plans to divest its worldwide acetochlor corn herbicide business, sold under the brand names Surpassr, Topnotchr and FulTimer (primarily in the US) and Trophyr, Wennerr and Relayr (primarily in the rest of the world), to address the concerns of both the US Federal Trade Commission (FTC) and the EC. 

Other key disposals agreed by Zeneca Agrochemicals to remove overlaps between its and Novartis' businesses in Europe include the sale of its European sulcotrione corn herbicide business (Mikador) and its worldwide flutriafol cereal fungicide business (including the Impactr brand). The combined turnover of all the Zeneca products to be divested or licensed was approximately $240m in 1999. 

In a separate announcement, Novartis gave details of the divestments it has agreed with the EC in order to secure approval to the merger. 

In June, Novartis announced that it had initiated the sale of its entire worldwide Flintr business, including the Swiss production facilities, to obtain both FTC and EC clearance of the merger. 

In addition to Flintr, the EC has also requested Novartis to divest or license certain other parts of its existing business. This includes the straight formulation of the fungicide cyproconazole in Europe, the herbicide propaquizafop, the insecticide tau-fluvalinate, and specific fungicide formulations, used for example on cereals in certain Nordic countries. Overall 1999 sales of the Novartis products to be divested or licensed are estimated at about $100 million. 

Without the combined sales of the activities to be divested by the two companies ($340 m), Syngenta would have had unaudited pro forma 1999 sales of approximately $7 billion. 

The merger remains subject to approval by the FTC, antitrust authorities in certain other jurisdictions and shareholders of AstraZeneca and Novartis. Both companies plan to hold Extraordinary General Meetings on October 11 to enable shareholders to vote on the merger. The companies are still aiming to complete the merger in the final quarter of this year. 

Company news release
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