China National Chemical Corporation

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF CHINA NATIONAL CHEMICAL CORPORATION CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATIONS OF SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT AND SECTION 7 OF THE CLAYTON ACT Docket No. C-4610; File No. 161 0093 Complaint, April 4, 2017 – Decision, June 13, 2017 This consent order addresses the $43 billion acquisition by China National Chemical Corporation of certain assets of Syngenta AG. The complaint alleges that the Acquisition, if consummated, would violate Section 7 of the Clayton Act and Section 5 of the Federal Trade Commission Act by lessening competition in the markets for formulated crop protection products based on paraquat, abamectin, and chlorothalonil in the United States. The consent order requires ChemChina subsidiary ADAMA to divest its paraquat, abamectin, and chlorothalonil crop protection businesses in the United States to American Vanguard Corporation and its affiliate Amvac Chemical Corporation. Participants For the Commission: Cem Akleman and David Morris. For the Respondent: Ellen Frye and Peter Guryan, Simpson Thacher & Bartlett LLP.

COMPLAINT Pursuant to the Clayton Act and the Federal Trade Commission Act, and its authority thereunder, the Federal Trade Commission (“Commission”), having reason to believe that Respondent China National Chemical Corporation (“ChemChina”), a corporation subject to the jurisdiction of the Commission, has agreed to acquire Syngenta AG (“Syngenta”), a corporation subject to the jurisdiction of the Commission, in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and it appearing to the Commission that a proceeding in respect thereof would be in the public interest, hereby issues its Complaint, stating its charges as follows: VOLUME 163 Complaint I. RESPONDENT 1. Respondent ChemChina is a corporation organized, existing and doing business under, and by virtue of, the laws of the People’s Republic of China, with its office and principal place of business located at No. 62 Beisihuanxilu, Haidian District, Beijing 100080, People’s Republic of China. ADAMA Agricultural Solutions Ltd. (“ADAMA”) is a wholly-owned subsidiary of ChemChina, doing business as ADAMA. ADAMA is a corporation organized, existing and doing business under, and by virtue of, the laws of Israel, with its corporate office and principal place of business located at Golan Street, Airport City 7019900, Israel. ADAMA manufactures, formulates and sells agricultural chemical products in the U.S. 2. Syngenta is a corporation organized, existing and doing business under, and by virtue of, the laws of Switzerland, with its office and principal place of business located at Schwarzwaldallee 215, Basel, Switzerland 4058.

3. Respondent and Syngenta are corporations who, either directly or through owned subsidiaries, are engaged in, among other activities, the manufacture, formulation, and sale of agricultural crop protection chemicals including formulations based on the active ingredients paraquat, abamectin, and chlorothalonil.

4. Respondent and Syngenta are corporations and at all times relevant herein have, either directly or through their subsidiaries, been engaged in commerce, as “commerce” is defined in Section 1 of the Clayton Act, as amended, 15 U.S.C. § 12, and Section 4 of the FTC Act, as amended, 15 U.S.C. § 44. II. THE PROPOSED ACQUISITION 5. Pursuant to an Agreement and Plan of Merger (“Merger Agreement”) dated February 2, 2016, ChemChina has agreed to cause China National Agrochemical Corporation Saturn (NL) B.V., an indirect wholly owned subsidiary of ChemChina, to submit a public tender offer for all publicly held registered shares and American Depository Shares of Syngenta at an offer price of $465 per share, for total consideration of up to $43 billion in cash CHINA NATIONAL CHEMICAL CORPORATION 745 Complaint (“Acquisition”). The Acquisition is subject to Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18. III. THE RELEVANT MARKET 6. For purposes of this Complaint, the relevant lines of commerce in which to analyze the Acquisition are formulated crop protection products based on the active ingredients paraquat, abamectin, and chlorothalonil. Formulated crop protection chemicals are based on key active ingredients that are diluted from a concentrated technical grade and formulated by the Respondent, Syngenta, and other chemical companies for application in the fields. Paraquat is an herbicide, which controls weeds and other vegetation. Abamectin is an insecticide, which controls insects and related pests. Chlorothalonil is a fungicide, which controls fungus.

7. Paraquat is a non-selective “burndown” herbicide, which means it does not discriminate between the weeds it controls and crops. It is used to clear fields prior to the growing season. Paraquat does not have the resistance issues of alternatives such as glyphosate and is significantly less expensive than other alternatives.

8. Abamectin is an insecticide used to kill mites, psyllid, and leafminers. It is used primarily in citrus and tree nut crops. Available alternatives to abamectin are either significantly more expensive because they are patent-protected or less effective. 9. Chlorothalonil is a broad-spectrum fungicide used primarily in peanuts and potatoes. Chlorothalonil is particularly effective because, unlike most fungicides, it operates with four modes of action and is critical for resistance management among growers.

10. For purposes of this Complaint, the relevant geographic area in which to analyze the effects of the Acquisition on the paraquat, abamectin, and chlorothalonil formulated crop protection chemical markets is the United States. The U.S. Environmental Protection Agency requires that manufacturers register both the technical active ingredient and the formulated products for sale in the United States under the Federal VOLUME 163 Complaint Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. § 136 et. seq. This registration requirement limits market access to a set of products consistent with U.S. regulatory requirements. IV. MARKET STRUCTURE 11. The markets for formulated crop protection products using the active ingredients paraquat, abamectin, and chlorothalonil in the United States are highly concentrated. Syngenta is the market leader in each of the three product markets, while ADAMA is either the largest or the second largest generic supplier. Post- Acquisition, the combined share of the Respondent and Syngenta would be over 60% in formulated crop protection products with the active ingredient paraquat. ADAMA is the generic market leader in formulated crop protection products with the active ingredient abamectin and post-Acquisition, the combined market share would be approximately 80%. ADAMA is the second largest generic supplier of formulated crop protection products with the active ingredient chlorothalonil, and post-Acquisition the combined market share would be over 40%. V. EXPANSION AND ENTRY BARRIERS 12. Entry into the relevant markets is not likely to be sufficient to counteract the anticompetitive effects of the Acquisition. New generic crop protection entrants typically forecast and ultimately achieve minimal market penetration while ADAMA, in contrast, has successfully maintained significantly higher market shares for an extended period of time. No new entrant is likely to become as robust a competitor as ADAMA is today for formulated crop protection products based on the active ingredients paraquat, abamectin, and chlorothalonil.

VI. EFFECTS OF THE ACQUISITION 13. The effects of the Acquisition, if consummated, may be to substantially lessen competition in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, by eliminating actual, direct, and substantial competition between ChemChina and Syngenta in the relevant markets. Specifically, the Acquisition would remove an important competitive constraint CHINA NATIONAL CHEMICAL CORPORATION 747 Order to Maintain Assets on ADAMA, thereby increasing the likelihood that the merged entity will unilaterally exercise market power in the relevant markets and that customers in the United States would be forced to pay higher prices or accept reduced service for crop protection formulations based on the active ingredients paraquat, abamectin, and chlorothalonil.

VII. VIOLATIONS CHARGED 14. The allegations contained in Paragraphs 1 through 13 above are hereby incorporated by reference as though fully set forth here.

15. The Acquisition described in Paragraph 5, if consummated, would constitute a violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18. 16. The Acquisition described in Paragraph 5, if consummated, would constitute a violation of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45. 17. The Merger Agreement described in Paragraph 5 constitutes a violation of Section 5 of the FTC Act, as amended, 15 U.S.C. § 45.

WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade Commission on this fourth day of April, 2017, issues its complaint against said Respondent. By the Commission.

ORDER TO MAINTAIN ASSETS The Federal Trade Commission having initiated an investigation of the proposed acquisition by Respondents China National Chemical Corporation, ADAMA Agricultural Solutions Ltd., and Makhteshim Agan of North America, Inc., d/b/a VOLUME 163 Order to Maintain Assets ADAMA (collectively “Respondents”) of the outstanding voting shares of Syngenta AG (“Syngenta”) and Respondents having been furnished thereafter with a copy of a draft of complaint that the Bureau of Competition proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge Respondents with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and Respondents, their attorneys, and counsel for the Commission having thereafter executed an agreement (“Consent Agreement”) containing consent orders, an admission by Respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said Consent Agreement is for settlement purposes only and does not constitute an admission by Respondents that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission’s Rules; and The Commission having thereafter considered the matter and having determined to accept the executed Consent Agreement and to place such Consent Agreement on the public record for a period of thirty (30) days for the receipt and consideration of public comments, now in further conformity with the procedure described in Commission Rule § 2.34, 16 C.F.R. § 2.34, the Commission hereby issues its complaint, makes the following jurisdictional findings and issues the following Order to Maintain Assets:

1. Respondent China National Chemical Corporation is a corporation organized, existing, and doing business under, and by virtue of, the laws of the People’s Republic of China, with its corporate office and principal place of business located at No. 62 Beisihuanxilu, Haidian District, Beijing 100080, People’s Republic of China.

2. Respondent ADAMA Agricultural Solutions Ltd. is a corporation organized, existing and doing business under, and by virtue of, the laws of Israel, with its CHINA NATIONAL CHEMICAL CORPORATION 749 Order to Maintain Assets corporate office and principal place of business located at Golan Street, Airport City 7019900, Israel. 3. Respondent Makhteshim Agan of North America, Inc. d/b/a ADAMA, is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of Delaware, with its corporate office and principal place of business located at 3120 Highwoods Blvd., Suite 100, Raleigh, North Carolina 27604. 4. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the Respondents and the proceeding is in the public interest.

ORDER I.

IT IS HEREBY ORDERED that, as used in this Order to Maintain Assets, the following definitions shall apply (to the extent any capitalized term appearing in this Order to Maintain Assets is not defined below, the term shall be defined as that term is defined in the Decision and Order contained in the Consent Agreement):

A. “ChemChina” means China National Chemical Corporation, its directors, officers, employees, agents, representatives, successors, and assigns; and the subsidiaries, divisions, groups, and affiliates in each case controlled by China National Chemical Corporation (including Respondent ADAMA), and the respective directors, officers, employees, agents, representatives, successors, and assigns of each. After the Acquisition, ChemChina shall include Syngenta. B. “ADAMA” means ADAMA Agricultural Solutions Ltd. and Makhteshim Agan of North America, Inc., their directors, officers, employees, agents, representatives, successors, and assigns; and the subsidiaries, divisions, groups and affiliates in each case controlled by ADAMA Agricultural Solutions VOLUME 163 Order to Maintain Assets Ltd. and Makhteshim Agan of North America, Inc., and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

C. “Respondents” means ChemChina and ADAMA, individually and collectively.

D. “Commission” means the Federal Trade Commission. E. “Acquirer” means (i) Amvac Chemical Corporation or (ii) any other Person that acquires the CP Assets pursuant to this Order.

F. “Acquisition” means the proposed acquisition described in the Transaction Agreement dated as of February 2, 2016, by and between China National Chemical Corporation, China National Agrochemical Corporation, and Syngenta AG relating to a public tender offer of BidCo for all publicly held registered shares and American Depositary Shares of Syngenta. G. “CP Assets” means the assets identified in Paragraph I.R. of the Decision and Order.

H. “CP Business” means the research, development, registration, manufacture, formulation, licensing, sale, and distribution by ADAMA of all CP Products, including products in development, for crop protection in the United States, prior to the Acquisition. I. “CP Employee” means any individual (i) employed by ADAMA on a full-time, part-time, or contract basis at any time as of and after the date of the announcement of the Acquisition and (ii) whose job responsibilities predominantly relate or predominantly related to the CP Business.

J. “CP Product(s)” means all of ADAMA’s crop protection products, including products in development, in which the sole Active Ingredient used in the formulation or sale of the product is one of the CHINA NATIONAL CHEMICAL CORPORATION 751 Order to Maintain Assets CP Active Ingredients, including but not limited to, the CP Products listed on Appendix A to this Order to Maintain Assets.

K. “Decision and Order” means the: 1. Proposed Decision and Order contained in the Consent Agreement in this matter until the issuance and service of a final Decision and Order by the Commission; and 2. Final Decision and Order issued by the Commission in this matter following the issuance and service of a final Decision and Order by the Commission.

L. “Divestiture Date” means the date on which Respondents (or the Divestiture Trustee) close on the transaction to divest any of the CP Assets to an Acquirer.

M. “Person” means any individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity or a governmental body.

II.

IT IS FURTHER ORDERED that until Respondents complete the divestiture required by Paragraph II.A. of the Decision and Order, Respondents shall operate the CP Business and CP Assets in the ordinary course of business consistent with past practices as of the date that Respondents announced the Acquisition, including but not limited to: A. Respondents shall:

1. Maintain (i) the CP Business and CP Assets in substantially the same condition (except for normal wear and tear) existing at the time Respondents sign the Consent Agreement and (ii) relations and VOLUME 163 Order to Maintain Assets goodwill with suppliers, customers, landlords, creditors, agents, and others having business relationships with the CP Business and CP Assets; 2. Staff the CP Business and CP Assets with sufficient employees to maintain the viability and competitiveness of the CP Business and CP Assets, including but not limited to, providing each CP Employee with reasonable financial incentives, if necessary, including continuation of all employee benefits and regularly scheduled raises and bonuses, to continue in his or her position pending divestiture of the CP Assets;

3. Provide the CP Business with sufficient financial and other resources to (i) operate the CP Business and CP Assets at least at the current rate of operation and staffing and to carry out, at their scheduled pace, all business plans, and all sales, promotional, and marketing activities in place prior to the Acquisition; (ii) perform all maintenance to, and replacements or remodeling of, the assets of the CP Business in the ordinary course of business and in accordance with past practice and current plans; (iii) carry on such capital projects, physical plant improvements, and business plans as are already underway or planned for which all necessary regulatory and legal approvals have been obtained, including but not limited to, existing or planned renovation, or expansion projects; and (iv) maintain the viability, competitiveness, and marketability of the CP Business and CP Assets; 4. Take such actions as are necessary to prevent the destruction, removal, wasting, deterioration, or impairment of the CP Business and CP Assets (other than normal wear and tear), and not sell, transfer, encumber, or otherwise impair the CP Assets (other than in the manner prescribed in the Decision and Order);

CHINA NATIONAL CHEMICAL CORPORATION 753 Order to Maintain Assets 5. Comply with Paragraphs II.C., II.D., II.E., and III. of the Decision and Order; and 6. Not take any affirmative action, or fail to take any action within Respondents’ control, as a result of which the viability, competitiveness, or marketability of the CP Business or CP Assets would be diminished.

B. The purpose of this Order to Maintain Assets is to (i) preserve the CP Business and CP Assets as a viable, competitive, and ongoing business until the divestiture required by the Decision and Order is achieved; (ii) prevent interim harm to competition pending the relevant divestiture and other relief; and (iii) help remedy any anticompetitive effects of the proposed Acquisition as alleged in the Commission’s Complaint. III.

IT IS FURTHER ORDERED that:

A. At any time after Respondents sign the Consent Agreement, the Commission may appoint Duff & Phelps B.V. to serve as Monitor to assure that Respondents expeditiously comply with all of their obligations and perform all of their responsibilities as required by this Order to Maintain Assets and the Decision and Order (collectively “Orders”) and the Divestiture Agreement.

B. Respondents shall enter into an agreement with the Monitor, subject to the prior approval of the Commission, that (i) shall become effective no later than one (1) day after the date the Commission appoints the Monitor, and (ii) confers upon the Monitor all rights, powers, and authority necessary to permit the Monitor to perform his duties and responsibilities on the terms set forth in the Orders and in consultation with the Commission:

VOLUME 163 Order to Maintain Assets 1. The Monitor shall (i) monitor Respondents’ compliance with the obligations set forth in the Orders and (ii) act in a fiduciary capacity for the benefit of the Commission;

2. Respondents shall (i) insure that the Monitor has full and complete access to all Respondents’ personnel, books, records, documents, and facilities relating to compliance with the Orders or to any other relevant information as the Monitor may reasonably request, and (ii) cooperate with, and take no action to interfere with or impede the ability of, the Monitor to perform his duties pursuant to the Orders;

3. The Monitor (i) shall serve at the expense of Respondents, without bond or other security, on such reasonable and customary terms and conditions as the Commission may set, and (ii) may employ, at the cost and expense of Respondents, such consultants, accountants, attorneys, and other representatives and assistants as are reasonably necessary to carry out the Monitor’s duties and responsibilities; 4. Respondents shall indemnify the Monitor and hold him harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of his duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparation for, or defense of, any claim, whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from the Monitor’s gross negligence or willful misconduct; and 5. Respondents may require the Monitor and each of the Monitor’s consultants, accountants, attorneys, and other representatives and assistants to sign a customary confidentiality agreement; provided, however, that such agreement shall not restrict the CHINA NATIONAL CHEMICAL CORPORATION 755 Order to Maintain Assets Monitor from providing any information to the Commission.

C. The Monitor shall report in writing to the Commission concerning Respondents’ compliance with the Orders on a schedule as determined by Commission staff. D. The Commission may require the Monitor and each of the Monitor’s consultants, accountants, attorneys, and other representatives and assistants to sign a confidentiality agreement related to Commission materials and information received in connection with the performance of the Monitor’s duties. E. The Monitor’s power and duties under this Order to Maintain Assets shall terminate when this Order to Maintain Assets terminates, or at such other time as directed by the Commission.

F. If at any time the Commission determines that the Monitor has ceased to act or failed to act diligently, or is unwilling or unable to continue to serve, the Commission may appoint a substitute Monitor, subject to the consent of Respondents, which consent shall not be unreasonably withheld:

1. If Respondents have not opposed, in writing, including the reasons for opposing, the selection of the substitute Monitor within five (5) days after notice by the staff of the Commission to Respondents of the identity of any substitute Monitor, then Respondents shall be deemed to have consented to the selection of the proposed substitute Monitor; and 2. Respondents shall, no later than five (5) days after the Commission appoints a substitute Monitor, enter into an agreement with the substitute Monitor that, subject to the approval of the Commission, confers on the substitute Monitor all the rights, powers, and authority necessary to permit the substitute Monitor to perform his or her duties and VOLUME 163 Order to Maintain Assets responsibilities pursuant to this Order to Maintain Assets on the same terms and conditions as provided in this Paragraph III.

G. The Commission may on its own initiative or at the request of the Monitor issue such additional orders or directions as may be necessary or appropriate to assure compliance with the requirements of the Orders. IV.

IT IS FURTHER ORDERED that:

A. Respondents shall file a verified written report with the Commission setting forth in detail the manner and form in which they intend to comply, are complying, and have complied with this Order to Maintain Assets and the Decision and Order within thirty (30) days from the date Respondents sign the Consent Agreement (as set forth in the Consent Agreement) and every thirty (30) days thereafter until this Order to Maintain Assets terminates;

Provided, however, that after the Decision and Order in this matter becomes final and effective, the reports due under this Order to Maintain Assets may be consolidated with, and submitted to the Commission at the same time as, the reports required to be submitted by Respondents pursuant to Paragraph VIII. of the Decision and Order.

B. With respect to any divestiture required by Paragraph II.A. of the Decision and Order, Respondents shall include in their compliance reports (i) the status of the divestiture and transfer of the CP Assets; (ii) a description of all substantive contacts with a proposed acquirer (if other than Amvac), and (iii) as applicable, a statement that the divestiture approved by the Commission has been accomplished, including a description of the manner in which Respondents have completed such divestiture and the date the divestiture was accomplished.

CHINA NATIONAL CHEMICAL CORPORATION 757 Order to Maintain Assets V.

IT IS FURTHER ORDERED that Respondents shall notify the Commission at least thirty (30) days prior to: A. Any proposed dissolution of any Respondent; B. Any proposed acquisition, merger, or consolidation of any Respondent; or C. Any other change in any Respondent, including, but not limited to, assignment and the creation or dissolution of subsidiaries, if such change might affect compliance obligations arising out of this Order to Maintain Assets.

VI.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order to Maintain Assets, and subject to any legally recognized privilege, and upon written request and upon five (5) days’ notice to Respondents, Respondents shall, without restraint or interference, permit any duly authorized representative of the Commission: A. Access, during business office hours of Respondents and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda, and other records and documents in the possession or under the control of Respondents related to compliance with this Order to Maintain Assets, which copying services shall be provided by Respondents at their expense; and B. To interview officers, directors, or employees of Respondents, who may have counsel present, regarding matters.

VII.

IT IS FURTHER ORDERED that this Order to Maintain Assets shall terminate:

VOLUME 163 Order to Maintain Assets A. Three (3) business days after the Commission withdraws its acceptance of the Consent Agreement pursuant to the provisions of Commission Rule 2.34, 16 C.F.R. § 2.34; or B. Three (3) business days after the date that Respondents complete the divestiture required by Paragraph II.A. of the Decision and Order; provided, however, that if at the time such divestiture has been completed, the Decision and Order in this matter is not yet final, then this Order to Maintain Assets shall terminate three (3) business days after the Decision and Order becomes final.

By the Commission.

Appendix A Specified Products Abamectin Products ABBA 0.15EC ABBA 0.15ME (Alternate Brand Names: BORRADA and ABBA 0.15) ABBA Ultra Miticide/Insecticide Chlorothalonil Products EQUUS DF EQUUS 500ZN EQUUS 720 SST Paraquat Products Parazone 3SL Parazone 2SL (pending EPA approval) CHINA NATIONAL CHEMICAL CORPORATION 759 Decision and Order DECISION AND ORDER The Federal Trade Commission, having initiated an investigation of the proposed acquisition by Respondents China National Chemical Corporation, ADAMA Agricultural Solutions Ltd., and Makhteshim Agan of North America, Inc., d/b/a ADAMA (collectively “Respondents”) of the outstanding voting shares of Syngenta AG (“Syngenta”) and Respondents having been furnished thereafter with a copy of a draft of complaint that the Bureau of Competition proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge Respondents with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and Respondents, their attorneys, and counsel for the Commission having thereafter executed an agreement (“Consent Agreement”) containing consent orders, an admission by Respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said Consent Agreement is for settlement purposes only and does not constitute an admission by Respondents that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission’s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that Respondents have violated the said Acts, and that a complaint should issue stating its charges in that respect, and having thereupon issued its complaint and its Order to Maintain Assets and having accepted the executed Consent Agreement and placed such Consent Agreement on the public record for a period of thirty (30) days for the receipt and consideration of public comments, and having duly considered the comments received from interested persons, now in further conformity with the procedure described in Commission Rule § 2.34, 16 C.F.R. § 2.34, the Commission hereby makes the following jurisdictional findings and issues the following Decision and Order (“Order”): 1. Respondent China National Chemical Corporation is a corporation organized, existing, and doing business VOLUME 163 Decision and Order under, and by virtue of, the laws of the People’s Republic of China, with its corporate office and principal place of business located at No. 62 Beisihuanxilu, Haidian District, Beijing 100080, People’s Republic of China.

2. Respondent ADAMA Agricultural Solutions Ltd. is a corporation organized, existing and doing business under, and by virtue of, the laws of Israel, with its corporate office and principal place of business located at Golan Street, Airport City 7019900, Israel. 3. Respondent Makhteshim Agan of North America, Inc. d/b/a ADAMA, is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of Delaware, with its corporate office and principal place of business located at 3120 Highwoods Blvd., Suite 100, Raleigh, North Carolina 27604. 4. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the Respondents and the proceeding is in the public interest.

ORDER I.

IT IS HEREBY ORDERED that, as used in this Order, the following definitions shall apply:

A. “ChemChina” means China National Chemical Corporation, its directors, officers, employees, agents, representatives, successors, and assigns; and the subsidiaries, divisions, groups, and affiliates in each case controlled by China National Chemical Corporation (including Respondent ADAMA), and the respective directors, officers, employees, agents, representatives, successors, and assigns of each. After the Acquisition, ChemChina shall include Syngenta. CHINA NATIONAL CHEMICAL CORPORATION 761 Decision and Order B. “ADAMA” means ADAMA Agricultural Solutions Ltd. and Makhteshim Agan of North America, Inc., their directors, officers, employees, agents, representatives, successors, and assigns; and the subsidiaries, divisions, groups and affiliates in each case controlled by ADAMA Agricultural Solutions Ltd. and Makhteshim Agan of North Americal, Inc., and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

C. “Respondents” means ChemChina and ADAMA, individually and collectively.

D. “Commission” means the Federal Trade Commission. E. “Abamectin” means a mixture of avermectins containing more than 80% avermectin B1a and less than 20% avermectin B1b (CAS#71751-41-2). F. “Acquirer” means (i) Amvac Chemical Corporation or (ii) any other Person that acquires the CP Assets pursuant to this Order.

G. “Acquisition” means the proposed acquisition described in the Transaction Agreement dated as of February 2, 2016, by and between China National Chemical Corporation, China National Agrochemical Corporation, and Syngenta AG relating to a public tender offer of BidCo for all publicly held registered shares and American Depositary Shares of Syngenta. H. “Acquisition Date” means the date the Acquisition is consummated.

I. “Active Ingredient” means the specific molecule or chemical substance that provides the relevant biological activity, such as insecticidal, fungicidal, herbicidal, or other similar activity. J. “Amvac” means Amvac Chemical Corporation, a corporation organized, existing, and doing business VOLUME 163 Decision and Order under and by virtue of the laws of the State of California, with its office and principal place of business located at 4695 MacArthur Court, Suite 1250, Newport Beach, California 92660.

K. “Amvac Acquisition Agreement” means the asset purchase and sale agreement between Makhteshim Agan of North America Inc., Adama Makhteshim Ltd., Adama Agan Ltd., and Amvac Chemical Corporation, dated March 22, 2017, including related ancillary agreements, amendments, schedules, exhibits, and attachments, thereto, that have been approved by the Commission to accomplish the requirements of this Order.

L. “Chlorothalonil” means the chemical compound 2,4,5,6-Tetrachlorobenzene-1,3-dicarbonitrile (CAS#1897-45-6).

M. “Confidential Information” means any and all of the following information:

1. all information that is a trade secret under applicable trade secret or other law;

2. all information concerning product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current and planned research and development, current and planned manufacturing or distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, software and computer software and database technologies, systems, structures, and architectures; 3. all information concerning the relevant business, which includes historical and current financial statements, financial projections and budgets, tax returns and accountants’ materials, historical, current and projected sales, capital spending CHINA NATIONAL CHEMICAL CORPORATION 763 Decision and Order budgets and plans, business plans, strategic plans, marketing and advertising plans, publications, client and customer lists and files, contracts, the names and backgrounds of key personnel and personnel training techniques and materials; and 4. all notes, analyses, compilations, studies, summaries and other material to the extent containing or based, in whole or in part, upon any of the information described above;

Provided, however, that Confidential Information shall not include information that (i) was, is, or becomes generally available to the public other than as a result of a breach of this Order; (ii) was or is developed independently of and without reference to any Confidential Information; or (iii) was available, or becomes available, on a non-confidential basis from a third party not bound by a confidentiality agreement or any legal, fiduciary or other obligation restricting disclosure.

N. “Consent” means any approval, consent, ratification, waiver, or other authorization.

O. “Cost” means the (i) actual cost of raw materials, direct labor, and administrative expenses, and reasonably allocated operations, production, and factory costs and shared corporate services overhead used to develop, manufacture, and supply the relevant good or service or (ii) the price terms as specified in a Divestiture Agreement with respect to Respondents’ obligation to provide products pursuant to Paragraph II.D.1(c).

P. “CP Active Ingredient(s)” means Abamectin, Chlorothalonil, or Paraquat, individually and collectively, as each is identified by its respective unique numerical identifier (CAS#) assigned by the Chemical Abstract Service division of the American Chemical Society.

VOLUME 163 Decision and Order Q. “CP Assets” means all of Respondents’ right, title, and interest in and to all of the following assets and rights, wherever located, relating to the operation of the CP Business:

1. All Governmental Authorizations;

2. All Registration Data;

3. All Specified Trademarks;

4. All Specified Intellectual Property; 5. All Specified Contracts, at the option of the Acquirer;

6. All Specified Inventory, at the option of the Acquirer; and 7. All Records;

Provided, however, that the CP Assets need not include ChemChina’s right, title, and interest in the Retained Intellectual Property.

R. “CP Business” means the research, development, registration, manufacture, formulation, licensing, sale, and distribution by ADAMA of all CP Products, including products in development, for crop protection in the United States, prior to the Acquisition. S. “CP Employee” means any individual (i) employed by ADAMA on a full-time, part-time, or contract basis at any time as of and after the date of the announcement of the Acquisition and (ii) whose job responsibilities predominantly relate or predominantly related to the CP Business.

T. “CP License” means:

1. A royalty-free, fully paid-up, perpetual, irrevocable, transferable, and sublicensable license CHINA NATIONAL CHEMICAL CORPORATION 765 Decision and Order under the Retained Intellectual Property sufficient for an Acquirer to operate the CP Business in substantially the same manner as ADAMA prior to the Acquisition, including the freedom to extend existing product lines and develop new products, that receives the prior approval of the Commission. The CP License shall be exclusive (even as to ChemChina) for use in the United States for any product sold in the United States for use in crop protection in which the sole Active Ingredient is one of the CP Active Ingredients; and 2. Such tangible embodiments of the licensed rights (including, but not limited to, physical and electronic copies) as may be necessary or appropriate to enable the Acquirer to use the rights. U. “CP Product(s)” means all of ADAMA’s crop protection products, including products in development, in which the sole Active Ingredient used in the formulation or sale of the product is one of the CP Active Ingredients, including but not limited to, the CP Products listed on Appendix A to this Order. V. “Divestiture Agreement” means (i) the Amvac Acquisition Agreement or (ii) any other agreement between Respondents (or a Divestiture Trustee) and Acquirer that receives the prior approval of the Commission to divest the CP Assets, including all related ancillary agreements (Transitional Assistance agreement (including for Support Services), intellectual property transfer and license agreement(s), and manufacturing services agreement), schedules, exhibits, and attachments thereto.

W. “Divestiture Date” means the date on which Respondents (or the Divestiture Trustee) close on the transaction to divest the CP Assets to the Acquirer. X. “Divestiture Trustee” means the Person appointed by the Commission pursuant to Paragraph V. of this Order.

VOLUME 163 Decision and Order Y. “Government Agency(ies)” means any federal, state, local, municipal, foreign, or other governmental regulatory authority responsible for registering, or for granting or issuing any consent, license, approval, permit, clearance, or qualification for, any aspect of the research, development, manufacture, formulation, licensing, sale, or distribution of any CP Products or any of the CP Active Ingredients.

Z. “Governmental Authorization” means any registration, consent, license, approval, permit, clearance, or qualification issued, granted, given or otherwise made available by or under the authority of any Government Agency or pursuant to any legal requirement, that is necessary for any aspect of the research, development, manufacture, formulation, licensing, sale, or distribution of any CP Product or any of the CP Active Ingredients, and all pending applications therefor or renewals thereof.

AA. “License-Back” means a worldwide, royalty-free, fully paid-up, perpetual, irrevocable, transferable, and sublicensable license to Respondents from the Acquirer under any Specified Intellectual Property included in the CP Assets (that is not exclusively related to the operation of the CP Business) for use in any business operated by Respondents prior to the Acquisition Date that does not compete with the CP Business.

BB. “Loyalty Program” means Syngenta’s Key Active Ingredient Support Program (Section 2 of Syngenta’s Crop Protection and Seedcare Retail Program & Policy Guide), or any other similar Syngenta program related to Syngenta’s crop protection business in the United States that provides to a distributor, retailer, other customer (“Syngenta Customer”) a discount for purchasing a defined minimum quantity (based on units, revenues, or any other measure) over a defined period of time of that Syngenta Customer’s demand for crop protection products containing a specified Active Ingredient as the sole Active Ingredient. CHINA NATIONAL CHEMICAL CORPORATION 767 Decision and Order CC. “Monitor” means the Person appointed by the Commission pursuant to Paragraph IV. of this Order. DD. “Paraquat” means the chemical compound 1,1’- Dimethyl-4,4’-bipyridinium dichloride (CAS#1910- 42-5).

EE. “Person” means any individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity or a governmental body.

FF. “Record(s)” means information, data, books, records, files, databases, printouts, and documents of any kind, whether stored or maintained in hard copy paper format, by means of electronic, optical, or magnetic media or devices, photographic or video images, or any other format or media, directly relating to the CP Products or the CP Business, including: customer files, customer lists, customer purchasing histories; correspondence; sales and purchase order information and records; referral sources; supplier, vendor, and procurement files and lists; specifications and information for all materials, ingredients, and components used in product formulation; process and production formulas, instructions, and guidelines, including Confidential Statements of Formulas; product data sheets and specifications; production reports; research and development data and information; quality control and quality assurance specifications, testing methods, and reports; labeling specifications; packaging specifications; Material Data Safety Sheets; advertising, marketing, display, and promotional materials; sales materials; marketing analyses and research data; educational and training materials; employee lists and contracts, salary and benefits information, and personnel files and records (to the extent permitted by law) for CP Employees; financial and accounting records and documents, financial statements; studies and reports; product registration data; registrations, licenses, and permits; VOLUME 163 Decision and Order regulatory compliance records and data; applications, filings, submissions, communications and correspondence with Government Agencies; operating guides, technical information, manuals, policies and procedures; service and warranty records, maintenance logs, equipment logs; and all other Records that are necessary for the Acquirer to operate the CP Business in a manner consistent with the purposes of this Order. GG. “Registration Data” means all data, information, and studies relating to a particular CP Active Ingredient and its formulations, including its impurities or metabolites, which are necessary for supporting an application to obtain a Governmental Authorization from an applicable Government Agency for the sale of a CP Product.

HH. “Retained Intellectual Property” means any Specified Intellectual Property relating to both the operation of the CP Business and any other business owned by ChemChina prior to the Acquisition.

II. “Specified Contract(s)” means all agreements, contracts, leases, license agreements, consensual obligations, promises, or undertakings (whether written or oral and whether express or implied), and all outstanding offers or solicitations to enter into any contract, and all rights thereunder and related thereto, including all rights relating to membership in any task force or task force seat, directly related to a CP Product or a CP Active Ingredient.

JJ. “Specified Intellectual Property” means the following intellectual property owned or licensed (as licensor or licensee) by Respondents, and all associated rights thereto, other than the Specified Trademarks, relating to the CP Products or the CP Business: (1) all trade secrets, know-how, technology, and confidential or proprietary information, including product specifications, manufacturing processes and data, and production formulas, including Confidential Statements of Formula, mixing and formulating CHINA NATIONAL CHEMICAL CORPORATION 769 Decision and Order instructions, protocols, guidelines, and methods; quality control and quality assurance data, specifications, and methods; technical data and information; and all other information relating to formulating, handling, packaging, labeling, storing, or transporting the CP Products; (2) the trade dress associated with the CP Products, including, but not limited to, product packaging and labeling and the lettering of the product trademark, trade name, or brand name; (3) all copyrights to all materials and works directly relating to the CP Products and the CP Business, including advertising, marketing, promotional and sales materials, customer materials and information, educational information and training materials, research and other data, reports, programs, and all correspondence and communications with any Government Agencies; and (4) all rights to obtain and file for patents, trademarks, copyrights, and registrations thereof and to sue and recover damages or obtain injunctive relief for infringement, dilution, misappropriation, misuse, violation, or breach of any of the foregoing.

KK. “Specified Inventory” means all inventories of finished CP Products packaged, labeled, and ready for sale pursuant to all legal requirements of all relevant Government Agencies.

LL. “Specified Trademarks” means all proprietary names or designations, trademarks, service marks, trade names, and brand names, including registrations and applications for registration therefor (and all renewals, modifications, and extensions thereof), and all common law rights, and goodwill symbolized thereby and associated therewith, and used specifically for the CP Products, including but not limited to, the “Specified Trademarks” listed on Appendix A to this Order.

MM. “Support Services” means administrative services, technical services, and training with respect to VOLUME 163 Decision and Order operating any aspect of the CP Business and CP Assets.

NN. “Syngenta” means Syngenta AG, a corporation organized, existing and doing business under, and by virtue of, the laws of Switzerland, with its corporate office and principal place of business located at Schwarzwaldallee 215, 4058 Basel, Switzerland. II.

IT IS FURTHER ORDERED that:

A. No later than twenty (20) days from the Acquisition Date, Respondents shall divest the CP Assets and grant the CP License, absolutely and in good faith, to Amvac pursuant to the Amvac Acquisition Agreement; provided, however, that Respondents may enter into an agreement with Amvac for a License-Back that receives the prior approval of the Commission. B. If Respondents have divested the CP Assets and granted the CP License to Amvac prior to the date this Order becomes final, and if, at the time the Commission determines to make this Order final, the Commission notifies Respondents that:

1. Amvac is not acceptable as the Acquirer of the CP Assets, then Respondents shall immediately rescind the Amvac Acquisition Agreement, and shall divest the CP Assets and grant the CP License no later than 120 days from the date this Order is issued, absolutely and in good faith, at no minimum price, to a Person that receives the prior approval of the Commission and in a manner that receives the prior approval of the Commission; or 2. The manner in which the divestiture or grant of license to Amvac was accomplished is not acceptable, the Commission may direct Respondents, or appoint a Divestiture Trustee, to effect such modifications (that shall be CHINA NATIONAL CHEMICAL CORPORATION 771 Decision and Order incorporated into a revised Amvac Acquisition Agreement) to the manner of divestiture of the CP Assets or grant of the CP License as the Commission may determine are necessary to satisfy the requirements of this Order. C. No later than the Divestiture Date, Respondents shall secure all Consents and Governmental Authorizations from all Persons that are necessary for the Acquirer to divest and operate the CP Business and CP Assets, except as provided for under a Divestiture Agreement; provided, however, that:

1. In the event that Respondents are unable to obtain any such Consent, Respondents shall, with the acceptance of the Acquirer and the prior approval of the Commission, substitute equivalent assets or arrangements; and 2. In the event that Respondents are unable to obtain any such Governmental Authorization, Respondents shall provide such assistance as the Acquirer may reasonably request in the Acquirer’s efforts to obtain a comparable authorization. D. Respondents shall:

1. At the option of the Acquirer and subject to the prior approval of the Commission, provide to the Acquirer:

a. Support Services for a period of eighteen (18) months from the Divestiture Date;

b. A supply of CP Products in which the sole Active Ingredient is Chlorothalonil or Abamectin for a period of twenty-four (24) months from the Divestiture Date; and c. A supply of CP Products in which the sole Active Ingredient is Paraquat for a period of VOLUME 163 Decision and Order thirty-six (36) months from the Divestiture Date; and 2. Provide the support set forth in Paragraph II.D.1.(a)-(c) of this Order (hereinafter collectively referred to as “Transitional Assistance”) at a price not to exceed Cost and in quality and quantity sufficient to enable Acquirer to operate the CP Business in substantially the same manner as Respondents prior to the Acquisition, including the ability to develop new products and increase sales of current products;

Provided, however, that if the CP Products or ability to provide services as Transitional Assistance pursuant to a Divestiture Agreement are or become limited for any reason, Respondents shall give priority to Acquirer’s requirements over its own;

Provided further that (i) Acquirer may terminate any Transitional Assistance at any time upon commercially reasonable notice and without cost or penalty to Respondents and (ii) at Acquirer’s request, Respondents shall file with the Commission any request for prior approval to extend the term of any Transitional Assistance needed to achieve the purposes of this Order; and Provided further that Respondents shall not (i) terminate its obligation to provide any Transitional Assistance because of a material breach by Acquirer of any agreement to provide such assistance, in the absence of a final order of a court of competent jurisdiction or (ii) seek to limit the damages (such as indirect, special, and consequential damages) which Acquirer would be entitled to receive in the event of Respondents’ breach of any agreement to provide Transitional Assistance.

E. Respondents shall cooperate with and assist the Acquirer to evaluate and hire any CP Employee in CHINA NATIONAL CHEMICAL CORPORATION 773 Decision and Order connection with the divestiture of the CP Assets, including but not limited to:

1. Not later than twenty (20) days before the Divestiture Date, Respondents shall (i) identify all CP Employees, (ii) allow Acquirer to inspect the personnel files and other documentation of all CP Employees, to the extent permissible under applicable laws, and (iii) allow Acquirer an opportunity to interview any CP Employee; 2. Respondents shall (i) not offer any incentive to any CP Employee to decline employment with Acquirer, (ii) remove any contractual impediments that may deter any CP Employee from accepting employment with Acquirer, including but not limited to, any non-compete or confidentiality provision of employment or other contracts with Respondents that would affect the ability of such employee to be employed by Acquirer, and (iii) not otherwise interfere with the recruitment, hiring, or employment of any CP Employee by Acquirer; 3. Respondents shall (i) vest all current and accrued pension benefits as of the date of transition of employment with Acquirer for any CP Employee who accepts an offer of employment from Acquirer and (ii) provide each CP Employee with reasonable financial incentive as necessary to accept offers of employment with Acquirer; and 4. For a period of two (2) years after the CP Assets are divested, Respondents shall not solicit the employment of any CP Employee who becomes employed by Acquirer at the time the CP Assets are divested; provided, however, that a violation of this provision will not occur if: (i) the individual’s employment has been terminated by Acquirer, (ii) Respondents advertise for employees in newspapers, trade publications, or other media not targeted specifically at the Acquirer’s employees, or (iii) Respondents hire employees who apply for VOLUME 163 Decision and Order employment with Respondents, so long as such employees were not solicited by Respondents in violation of this paragraph.

F. Respondents shall:

1. Not join, file, prosecute, or maintain any suit, in law or equity, or take any administrative action, either directly or indirectly through a third party (including assignees, transferees, or licensees), against the Acquirer or any of its customers or affiliates (including distributors, licensees, manufacturers, and suppliers), assigns or successors in interest, under or with regard to any Retained Intellectual Property if such suit or action would interfere with the Acquirer’s freedom to practice in developing, registering, producing, manufacturing, formulating, distributing, marketing, or selling in the United States any noncrop protection products in which the sole Active Ingredient used in the formulation or sale of the product is one of the CP Active Ingredients; and 2. Include a covenant not to sue or take any other action effecting the foregoing prohibitions in Paragraph II.F.1 of this Order in any Divestiture Agreement related to the CP Assets.

G. The purpose of the divestiture of the CP Assets is to ensure the continued use of the assets in the same businesses in which such assets were engaged at the time of the announcement of the Acquisition by Respondents and to remedy the lessening of competition resulting from the Acquisition as alleged in the Commission’s Complaint.

III.

IT IS FURTHER ORDERED that:

A. Respondents shall (i) keep confidential (including as to Respondents’ employees) and (ii) not use for any CHINA NATIONAL CHEMICAL CORPORATION 775 Decision and Order reason or purpose, any Confidential Information received or maintained by Respondents relating to the CP Business or CP Assets; provided, however, that Respondents may disclose or use such Confidential Information in the course of:

1. Performing its obligations or as permitted under this Order, the Order to Maintain Assets, or Divestiture Agreement; or 2. Complying with financial reporting requirements, obtaining legal advice, prosecuting or defending legal claims, investigations, or enforcing actions threatened or brought against the CP Business or CP Assets, or as required by law.

B. If disclosure or use of any Confidential Information is permitted to Respondents’ employ-ees or to any other Person under Paragraph III.A. of this Order, Respondents shall limit such disclosure or use (i) only to the extent such information is required, (ii) only to those employees or Persons who require such information for the purposes permitted under Paragraph III.A., and (iii) only after such employees or Persons have signed an agreement to maintain the confidentiality of such information.

C. Respondents shall enforce the terms of this Paragraph III. as to its employees or any other Person, and take such action as is necessary to cause each of its employees and any other Person to comply with the terms of this Paragraph III., including implementation of access and data controls, training of its employees, and all other actions that Respondents would take to protect their own trade secrets and proprietary information.

IV.

IT IS FURTHER ORDERED that, for a period of three (3) years from the earlier of (i) the expiration of the current annual Loyalty Programs or (ii) October 1, 2017, Respondents shall VOLUME 163 Decision and Order exclude crop protection products containing any one of the CP Active Ingredients as the sole Active Ingredient from any Loyalty Program in the United States; provided, however, that this provision is not intended to cover volume discounts offered in the ordinary course of business or other current of future Syngenta programs, so long as those programs do not have a substantially similar effect as a Loyalty Program for any crop protection products containing a CP Active Ingredient as the sole Active Ingredient.

V.

IT IS FURTHER ORDERED that:

A. At any time after Respondents sign the Consent Agreement, the Commission may appoint Duff & Phelps B.V. to serve as Monitor to assure that Respondents expeditiously comply with all of their obligations and perform all of their responsibilities as required by this Order and the Divestiture Agreement. B. Respondents shall enter into an agreement with the Monitor, subject to the prior approval of the Commission, that (i) shall become effective no later than one (1) day after the date the Commission appoints the Monitor, and (ii) confers upon the Monitor all rights, powers, and authority necessary to permit the Monitor to perform his duties and responsibilities on the terms set forth in this Order and in consultation with the Commission:

1. The Monitor shall (i) monitor Respondents’ compliance with the obligations set forth in this Order and (ii) act in a fiduciary capacity for the benefit of the Commission;

2. Respondents shall (i) ensure that the Monitor has full and complete access to all Respondents’ personnel, books, records, documents, and facilities relating to compliance with this Order or to any other relevant information as the Monitor may reasonably request, and (ii) cooperate with, CHINA NATIONAL CHEMICAL CORPORATION 777 Decision and Order and take no action to interfere with or impede the ability of, the Monitor to perform his duties pursuant to this Order;

3. The Monitor (i) shall serve at the expense of Respondents, without bond or other security, on such reasonable and customary terms and conditions as the Commission may set, and (ii) may employ, at the cost and expense of Respondents, such consultants, accountants, attorneys, and other representatives and assistants as are reasonably necessary to carry out the Monitor’s duties and responsibilities; 4. Respondents shall indemnify the Monitor and hold him harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of his duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparation for, or defense of, any claim, whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from the Monitor’s gross negligence or willful misconduct; and 5. Respondents may require the Monitor and each of the Monitor’s consultants, accountants, attorneys, and other representatives and assistants to sign a customary confidentiality agreement; provided, however, that such agreement shall not restrict the Monitor from providing any information to the Commission.

C. The Monitor shall report in writing to the Commission (i) every thirty (30) days after the Acquisition Date for a period of one (1) year, (ii) every ninety (90) days thereafter until Respondents have completed all obligations required by Paragraph II. of this Order (including a final report when Respondents have completed all such obligations), and (iii) at any other VOLUME 163 Decision and Order time as requested by the staff of the Commission, concerning Respondents’ compliance with this Order. D. The Commission may require the Monitor and each of the Monitor’s consultants, accountants, attorneys, and other representatives and assistants to sign a confidentiality agreement related to Commission materials and information received in connection with the performance of the Monitor’s duties. E. The Monitor’s power and duties shall terminate ten (10) business days after the Monitor has completed his final report pursuant to Paragraph V.C.(ii) of this Order, or at such other time as directed by the Commission.

F. If at any time the Commission determines that the Monitor has ceased to act or failed to act diligently, or is unwilling or unable to continue to serve, the Commission may appoint a substitute Monitor, subject to the consent of Respondents, which consent shall not be unreasonably withheld:

1. If Respondents have not opposed, in writing, including the reasons for opposing, the selection of the substitute Monitor within five (5) days after notice by the staff of the Commission to Respondents of the identity of any substitute Monitor, then Respondents shall be deemed to have consented to the selection of the proposed substitute Monitor; and 2. Respondents shall, no later than five (5) days after the Commission appoints a substitute Monitor, enter into an agreement with the substitute Monitor that, subject to the approval of the Commission, confers on the substitute Monitor all the rights, powers, and authority necessary to permit the substitute Monitor to perform his or her duties and responsibilities pursuant to this Order on the same terms and conditions as provided in this Paragraph V.

CHINA NATIONAL CHEMICAL CORPORATION 779 Decision and Order G. The Commission may on its own initiative or at the request of the Monitor issue such additional orders or directions as may be necessary or appropriate to assure compliance with the requirements of this Order. VI.

IT IS FURTHER ORDERED that:

A. If Respondents have not fully complied with the divestiture and other obligations as required by Paragraph II. of this Order, the Commission may appoint a Divestiture Trustee to divest the CP Assets and grant the CP License and perform Respondents’ other obligations in a manner that satisfies the requirements of this Order. The Divestiture Trustee appointed pursuant to this Paragraph may be the same Person appointed as Monitor.

B. In the event that the Commission or the Attorney General brings an action pursuant to § 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l), or any other statute enforced by the Commission, Respondents shall consent to the appointment of a Divestiture Trustee in such action to divest the relevant assets in accordance with the terms of this Order. Neither the appointment of a Divestiture Trustee nor a decision not to appoint a Divestiture Trustee under this Paragraph shall preclude the Commission or the Attorney General from seeking civil penalties or any other relief available to it, including a court-appointed Divestiture Trustee, pursuant to § 5(l) of the Federal Trade Commission Act, or any other statute enforced by the Commission, for any failure by the Respondents to comply with this Order.

C. The Commission shall select the Divestiture Trustee, subject to the consent of Respondents, which consent shall not be unreasonably withheld. The Divestiture Trustee shall be a person with experience and expertise in acquisitions and divestitures. If Respondents have not opposed, in writing, including the reasons for VOLUME 163 Decision and Order opposing, the selection of any proposed Divestiture Trustee within ten (10) days after notice by the staff of the Commission to Respondents of the identity of any proposed Divestiture Trustee, Respondents shall be deemed to have consented to the selection of the proposed Divestiture Trustee.

D. Within ten (10) days after appointment of a Divestiture Trustee, Respondents shall execute a trust agreement that, subject to the prior approval of the Commission, transfers to the Divestiture Trustee all rights and powers necessary to permit the Divestiture Trustee to effect the relevant divestiture or other action required by the Order.

E. If a Divestiture Trustee is appointed by the Commission or a court pursuant to this Order, Respondents shall consent to the following terms and conditions regarding the Divestiture Trustee’s powers, duties, authority, and responsibilities: 1. Subject to the prior approval of the Commission, the Divestiture Trustee shall have the exclusive power and authority to assign, grant, license, divest, transfer, deliver, or otherwise convey the relevant assets that are required by this Order to be assigned, granted, licensed, divested, transferred, delivered, or otherwise conveyed, and to take such other action as may be required to divest the CP Assets and grant the CP License;

2. The Divestiture Trustee shall have twelve (12) months from the date the Commission approves the trust agreement described herein to accomplish the divestiture, which shall be subject to the prior approval of the Commission. If, however, at the end of the twelve (12) month period, the Divestiture Trustee has submitted a plan of divestiture or believes that the divestiture can be achieved within a reasonable time, the divestiture period may be extended by the Commission, or in CHINA NATIONAL CHEMICAL CORPORATION 781 Decision and Order the case of a court-appointed Divestiture Trustee, by the court;

3. Subject to any demonstrated legally recognized privilege, the Divestiture Trustee shall have full and complete access to the personnel, books, records, and facilities related to the relevant assets that are required to be assigned, granted, licensed, divested, delivered, or otherwise conveyed by this Order and to any other relevant information, as the Divestiture Trustee may request. Respondents shall develop such financial or other information as the Divestiture Trustee may request and shall cooperate with the Divestiture Trustee. Respondents shall take no action to interfere with or impede the Divestiture Trustee’s accomplishment of the divestiture. Any delays in divestiture caused by Respondents shall extend the time for divestiture under this Paragraph VI in an amount equal to the delay, as determined by the Commission or, for a court-appointed Divestiture Trustee, by the court;

4. The Divestiture Trustee shall use commercially reasonable best efforts to negotiate the most favorable price and terms available in each contract that is submitted to the Commission, subject to Respondents’ absolute and unconditional obligation to divest expeditiously and at no minimum price. The divestiture shall be made in the manner and to an Acquirer as required by this Order; provided, however, if the Divestiture Trustee receives bona fide offers from more than one acquiring entity, and if the Commission determines to approve more than one such acquiring entity, the Divestiture Trustee shall divest to the acquiring entity selected by Respondents from among those approved by the Commission; provided further, however, that Respondents shall select such entity within five (5) days of receiving notification of the Commission’s approval;

VOLUME 163 Decision and Order 5. The Divestiture Trustee shall serve, without bond or other security, at the cost and expense of Respondents, on such reasonable and customary terms and conditions as the Commission or a court may set. The Divestiture Trustee shall have the authority to employ, at the cost and expense of Respondents, such consultants, accountants, attorneys, investment bankers, business brokers, appraisers, and other representatives and assistants as are necessary to carry out the Divestiture Trustee’s duties and responsibilities. The Divestiture Trustee shall account for all monies derived from the divestiture and all expenses incurred. After approval by the Commission and, in the case of a court-appointed Divestiture Trustee, by the court, of the account of the Divestiture Trustee, including fees for the Divestiture Trustee’s services, all remaining monies shall be paid at the direction of the Respondents, and the Divestiture Trustee’s power shall be terminated. The compensation of the Divestiture Trustee shall be based at least in significant part on a commission arrangement contingent on the divestiture of all of the relevant assets that are required to be divested by this Order;

6. Respondents shall indemnify the Divestiture Trustee and hold the Divestiture Trustee harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of the Divestiture Trustee’s duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparation for, or defense of, any claim, whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from gross negligence or willful misconduct by the Divestiture Trustee. For purposes of this Paragraph VI.E.6., the term “Divestiture Trustee” shall include all Persons CHINA NATIONAL CHEMICAL CORPORATION 783 Decision and Order retained by the Divestiture Trustee pursuant to Paragraph VI.E.5. of this Order;

7. The Divestiture Trustee shall have no obligation or authority to operate or maintain the relevant assets required to be divested by this Order; 8. The Divestiture Trustee shall report in writing to Respondents and to the Commission every sixty (60) days concerning the Divestiture Trustee’s efforts to accomplish the divestiture; and 9. Respondents may require the Divestiture Trustee and each of the Divestiture Trustee’s consultants, accountants, attorneys, and other representatives and assistants to sign a customary confidentiality agreement; provided, however, such agreement shall not restrict the Divestiture Trustee from providing any information to the Commission. F. The Commission may require the Divestiture Trustee and each of the Divestiture Trustee’s consultants, accountants, attorneys, and other representatives and assistants to sign a confidentiality agreement related to Commission materials and information received in connection with the performance of the Divestiture Trustee’s duties.

G. If the Commission determines that a Divestiture Trustee has ceased to act or failed to act diligently, the Commission may appoint a substitute Divestiture Trustee in the same manner as provided in this Paragraph VI.

H. The Commission or, in the case of a court-appointed Divestiture Trustee, the court, may on its own initiative or at the request of the Divestiture Trustee issue such additional orders or directions as may be necessary or appropriate to accomplish the divestitures and other obligations or action required by this Order. VOLUME 163 Decision and Order VII.

IT IS FURTHER ORDERED that:

A. The Divestiture Agreement shall be incorporated by reference into this Order and made a part hereof, and Respondents shall comply with all terms of the agreement. Any failure by Respondents to comply with any term of the Divestiture Agreement shall constitute a failure to comply with this Order. The Divestiture Agreement shall not limit or contradict, or be construed to limit or contradict, the terms of this Order and nothing in this Order shall be construed to reduce any rights or benefits of the Acquirer or to reduce any obligations of Respondents under such agreement.

B. If any term of the Divestiture Agreement varies from the terms of this Order (“Order Term”), then to the extent that Respondents cannot fully comply with both terms, the Order Term shall determine Respondents’ obligations under this Order. Respondents shall not modify, replace, or extend the terms of the Divestiture Agreement without the prior approval of the Commission, except as otherwise provided in Rule 2.41(f)(5) of the Commission’s Rules of Practice and Procedure, 16 C.F.R. § 2.41(f)(5). Notwithstanding any term of the Divestiture Agreement, any modification, replacement, or extension of any term of the Divestiture Agreement made without the prior approval of the Commission, or as otherwise provided in Rule 2.41(f)(5), shall constitute a failure to comply with this Order.

VIII.

IT IS FURTHER ORDERED that:

A. Respondents shall file a verified written report with the Commission setting forth in detail the manner and form in which they intend to comply, are complying, and have complied with this Order:

CHINA NATIONAL CHEMICAL CORPORATION 785 Decision and Order 1. Thirty (30) days from the date this Order is issued and every thirty (30) days thereafter for a period of one (1) year and every ninety (90) days thereafter until Respondents have fully complied with the provisions of Paragraphs II.D. and II.E. of this Order; and 2. No later than one (1) year after the date this Order is issued and annually thereafter until this Order terminates, and at such other times as the Commission staff may request.

B. With respect to the divestiture required by Paragraph II. of this Order, Respondents shall include in their compliance reports (i) the status of the divestiture and transfer of the CP Assets; (ii) a description of all substantive contacts with a proposed acquirer (if other than Amvac); and (iii) as applicable, a statement that the divestiture approved by the Commission has been accomplished, including a description of the manner in which Respondents have completed such divestiture and the date the divestiture was accomplished. IX.

IT IS FURTHER ORDERED that Respondents shall notify the Commission at least thirty (30) days prior to: A. Any proposed dissolution of any Respondent; B. Any proposed acquisition, merger, or consolidation of any Respondent; or C. Any other change in any Respondent, including, but not limited to, assignment and the creation or dissolution of subsidiaries, if such change might affect compliance obligations arising out of this Order. X.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order, and subject VOLUME 163 Decision and Order to any legally recognized privilege, and upon written request and upon five (5) days’ notice to Respondent, Respondents shall, without restraint or interference, permit any duly authorized representative of the Commission:

A. Access, during business office hours of the Respondents and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and all other records and documents in the possession, or under the control, of the Respondents related to compliance with this Order, which copying services shall be provided by the Respondents at their expense; and B. To interview officers, directors, or employees of the Respondents, who may have counsel present, regarding such matters.

XI.

IT IS FURTHER ORDERED that this Order shall terminate on June 13, 2027.

By the Commission.

CHINA NATIONAL CHEMICAL CORPORATION 787 Decision and Order Appendix A Specified Products Abamectin Products ABBA 0.15EC ABBA 0.15ME (Alternate Brand Names: BORRADA and ABBA 0.15) ABBA Ultra Miticide/Insecticide Chlorothalonil Products EQUUS DF EQUUS 500ZN EQUUS 720 SST Paraquat Products Parazone 3SL Parazone 2SL (pending EPA approval) Specified Trademarks PARAZONE EQUUS ABBA ABBA Ultra BORRADA VOLUME 163 Analysis to Aid Public Comment ANALYSIS OF CONSENT ORDER TO AID PUBLIC COMMENT I. Introduction The Federal Trade Commission (“Commission”) has accepted from China National Chemical Corporation (“ChemChina”), subject to final approval, an Agreement Containing Consent Orders (“Consent Agreement”). The Consent Agreement, which contains a proposed Decision and Order (“Order”) and Order to Maintain Assets, is designed to remedy the anticompetitive effects resulting from ChemChina’s proposed acquisition of Syngenta AG (“Syngenta”).

Pursuant to an agreement signed on February 2, 2016 (the “Agreement”), ChemChina, through an indirect subsidiary, will submit a public tender offer for all publicly registered shares and American Depository Shares of Syngenta at an offer price of $465 per share, for total consideration of up to $43 billion in cash (the “Acquisition”). The proposed Acquisition would result in highly concentrated markets and raise significant competitive concerns in the markets for the herbicide paraquat, the insecticide abamectin, and the fungicide chlorothalonil in the United States. The Commission’s Complaint alleges that the proposed Acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended 15 U.S.C. § 45, by lessening competition in the markets for formulated crop protection products based on paraquat, abamectin, and chlorothalonil in the United States.

The Consent Agreement remedies the alleged violation by replacing the competition in the three relevant markets that would be lost as a result of the proposed Acquisition. Under the terms of the Consent Agreement, ChemChina subsidiary ADAMA will divest its paraquat, abamectin, and chlorothalonil crop protection businesses in the United States to American Vanguard Corporation and its affiliate Amvac Chemical Corporation (collectively “AMVAC”).

The Consent Agreement and proposed Order have been placed on the public record for 30 days to solicit comments from CHINA NATIONAL CHEMICAL CORPORATION 789 Analysis to Aid Public Comment interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission will review the Consent Agreement and the comments received, and decide whether it should withdraw, modify, or make final the Consent Agreement and proposed Order.

II. The Parties ChemChina is a Chinese state-owned entity and is a diversified chemical company headquartered in Haidian District Beijing, China. ChemChina owns an Israel-based crop protection company, ADAMA. This wholly-owned subsidiary produces and/or sells formulated crop protection products based on paraquat, abamectin, and chlorothalonil. Headquartered in Basel, Switzerland, Syngenta is a large research-based global agriculture company that manufactures and sells numerous crop protection products including paraquat, abamectin, and chlorothalonil.

III. Crop Protection Formulations The relevant lines of commerce in which to analyze the effects of the proposed Acquisition are crop protection formulations based on the active ingredients paraquat, abamectin, and chlorothalonil. Crop protection formulations are used to protect crops from pests. These formulations are based on key active ingredients, which are diluted from a concentrated technical grade. Crop protection chemicals fall into three broad categories: 1) herbicides, which control for weeds and other vegetation; 2) fungicides, which control fungus; and 3) insecticides, which control insects. Of the relevant lines of commerce, paraquat is a herbicide, abamectin is an insecticide, and chlorothalonil is a fungicide.

Paraquat is non-selective “burndown” herbicide, which means it does not discriminate between weeds and crops. It is used to clear fields prior to the growing season. The use of paraquat has increased in recent years due to the resistance issues faced by glyphosate caused by its overuse. Other paraquat alternatives that do not have glyphosate’s resistance issues are significantly more expensive than paraquat.

VOLUME 163 Analysis to Aid Public Comment Abamectin is an insecticide used to kill mites, psyllid, and leafminers. It is used primarily in citrus and tree nut crops. Other alternative miticides are either significantly more expensive than abamectin because they are still on patent, or are less effective than abamectin. Due to resistance issues faced by insecticides, it is typical for a grower to spray five to six different types of miticides per season. Abamectin generally appears in any insecticide rotation because it is inexpensive and highly effective. Chlorothalonil is a broad spectrum fungicide used primarily to protect peanuts and potatoes. Chlorothalonil is particularly effective because it operates with four modes of action and is critical to growers for resistance management. Syngenta recommends that growers rotate or mix chlorothalonil with systemic fungicides to prevent or slow development of resistance to single-site mode of action fungicides. The relevant geographic area in which to analyze the effects of the Acquisition on the formulated crop protection markets is the United States. The Environmental Protection Agency requires that manufacturers register both the technical active ingredient and the formulated products for sales in the United States under the Federal Insecticide, Fungicide, and Rodenticide Act. This registration requirement limits market access to a set of products that meet U.S. regulatory requirements. Each of the products at issue were either developed or acquired by a Syngenta predecessor company, meaning that Syngenta offers the branded version of the product and has significant market shares in each. ADAMA is either the first or second largest generic supplier for each of these products. For paraquat, ADAMA is currently the second largest supplier behind Syngenta and another generic supplier. Post-Acquisition, the combined share of the two firms would be over 60%. ADAMA is the generic market leader for abamectin and has been for some time. Post-Acquisition, the combined share of the two firms would be close to 80%. Finally, ADAMA is the second largest generic supplier of chlorothalonil and post-Acquisition the combined share of the two firms would be over 40%. There are a number of other generic providers of crop protection products generally, as well as other generic providers of paraquat, abamectin, and chlorothalonil. However, they have been largely CHINA NATIONAL CHEMICAL CORPORATION 791 Analysis to Aid Public Comment unable to gain sufficient share to rival the scale and market position ADAMA holds in the markets for these three products. The proposed Acquisition removes significant competition between Syngenta and ADAMA. Though branded and generic companies employ different business models, the available evidence shows meaningful competition between the merging parties. Syngenta, for example, has lowered the price of its crop protection products in response to competitive pressure from ADAMA.

Entry will not be sufficient to deter or counteract the anticompetitive effects of the proposed Acquisition. While generic entry may be likely and occur in a timely manner, it is unlikely to be sufficient to replace the competitive significance and scale of ADAMA. Typically, new entrants forecast and ultimately achieve minimal market penetration while ADAMA, in contrast, has successfully maintained significantly higher market shares for an extended period of time. ADAMA has been a more robust competitor for the products at issue through economies of scale and more favorable supply agreements. IV. The Consent Agreement The Consent Agreement eliminates the competitive concerns raised by ChemChina’s proposed acquisition of Syngenta by requiring ChemChina to sell ADAMA’s U.S. paraquat, abamectin, and chlorothalonil crop protection businesses. The Consent Agreement requires ChemChina to sell the relevant business assets to AMVAC, or another acquirer approved by the Commission through a purchase agreement approved by the Commission.

AMVAC is well positioned to replace the competition that will be eliminated as a result of the proposed Acquisition. It has the industry experience, reputation, and resources to replace ADAMA as an effective competitor in the U.S. markets for formulated crop protection products based on paraquat, abamectin, and chlorothalonil. The company is headquartered in Newport Beach, California, and has four separate manufacturing facilities within the U.S. AMVAC is an experienced player in the agrochemical segments in which ADAMA and Syngenta operate, VOLUME 163 Analysis to Aid Public Comment and sells to the same customer base. AMVAC currently manufacturers and formulates a large number of crop protection chemicals including herbicides, insecticides, and fungicides. The products to be divested will complement its current product lines. Finally, due to its wide spectrum of crop protection products, AMVAC is well placed to develop, register, and market new combination products, further improving scale in both crop protection and turf and ornamental applications. Pursuant to the Consent Agreement, AMVAC (or another approved acquirer) would acquire all of the assets and other such rights necessary to be an effective competitor for paraquat-, abamectin-, and chlorothalonil-based crop protection formulations. This will include the U.S. product registrations and registration data packages for both the formulated products and the technical active ingredients, all intellectual property rights associated with the products including confidential statements of formulation, and inventories. The divesture also will include a cost-competitive transitional supply agreement for the supply of paraquat with Sanonda, ADAMA’s low cost paraquat supplier, which is majority-owned by ChemChina, and a transitional services agreement with ADAMA. In addition, the Consent Agreement requires the removal of crop protection products containing any one of the three active ingredients from Syngenta’s loyalty program for three years. This nurturing provision is to help ensure that AMVAC (or any approved acquirer) can step into the shoes of ADAMA and ultimately retain its competitiveness and scale.

The purpose of this analysis is to facilitate public comment on the Consent Agreement. It is not intended to constitute an official interpretation of the proposed Order or to modify its terms in any way.

INTERLOCUTORY, MODIFYING, VACATING, AND MISCELLANEOUS ORDERS ____________________