DuPont Co. (DD:US) faces renewed opposition to its planned purchase of South Africa (SBK)’s Pannar Seed Pty Ltd. as antitrust regulators seek to block the deal against a backdrop of interest in the target company from competitors including Syngenta AG. (SYNN)
While South Africa turned down an initial appeal against the takeover, the local competition commission has filed a new application to appeal to the Supreme Court of Appeal as it faces paying DuPont’s earlier legal costs, Competition Commission divisional manager Trudi Makhaya said in a phone interview.
DuPont’s takeover of Pannar will effectively split South Africa’s $450 million seed market between its Pioneer seed- making unit and Monsanto Co. (MON:US), locking out Syngenta. South Africa, which accounts for the bulk of Syngenta’s current business in Africa, won’t be a focus for resources given the “good headstart” that Monsanto and Dupont have, Chief Executive Officer Mike Mack said in an interview last month.
“We are pleased that the Commission has decided to appeal the ruling,” Syngenta spokesman Daniel Braxton said by email, adding that the Basel-based supplier of agrochemicals and seeds agrees that the merger would “concentrate power in maize seed breeding and supply markets in the hands of two players.”
If the deal is successfully appealed, Pannar would be “at liberty to consider other transactions” with companies including Syngenta, Makhaya said. That outcome would swing the balance of power in Africa, the latest frontier market for farm chemical suppliers, in favor of Syngenta and Dow Chemical Co. (DOW:US)
Pioneer and Pannar are aware of the application to appeal and “will continue to pursue their right to implement their partnership,” Pioneer spokeswoman Sharyl Sauer said in a statement.
The Competition Commission is waiting for the merging parties to respond to its application, and proceeding with the merger will be at their own risk, Makhaya said. The earlier ruling would hold South Africa’s taxpayers liable to Dupont’s legal costs, she said.
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