The companies met with the EU antitrust authority a week ago in a bid to allay competition concerns about China’s largest-ever foreign investment. They had until Oct. 21 to do so.

Commission spokesman Ricardo Cardoso said in an email that the companies had not offered any concessions.

This means either the Commission will clear the deal unconditionally by an Oct. 28 deadline or open a full investigation, a process that can take up to five months.

Asked about the matter, a Syngenta spokesman said the company remained confident the deal would conclude by year’s end. The spokesman later clarified this statement, saying he was simply repeating Syngenta’s previous public comment made on July 22.

Syngenta said it would provide an update on the progress of the deal with its third-quarter trading statement on Tuesday.

Its Swiss-listed shares closed down 5.8 per cent at 397.50 Swiss francs, off a session low at 383.50 and below ChemChina’s agreed cash offer of US$465 per share, which is worth around 462 Swiss francs at current exchange rates, plus a special dividend of five Swiss francs.

Meanwhile, the Australian Competition and Consumer Commission (ACCC) said on its website that its decision date of Oct. 27 was “delayed at the request of the merger parties so that they can provide more information to the ACCC. A new proposed decision date will be published in due course.”

Analysts at Baader Helvea said they viewed the share price fall as “harsh but understandable”, but nevertheless expected the deal to be closed by the first half of next year.

“We think the (Commission) is playing political poker to secure for the EU important points (i.e. GMO-related topics, trade topics, etc.) and therefore the EC tries to increase pressure on ChemChina/China to come up with interesting offers,” they said in a note to investors.

While Syngenta’s forecast that it would close this year seemed “ambitious,” they did not see the deal as being at risk.

“If the worst-worst scenario takes place and the deal fails, we think BASF again would be interested,” they added, although any offer from the German group might be below ChemChina’s deal.

— Reporting for Reuters by Foo Yun Chee in Brussels and Oliver Hirt in Zurich.

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Any takeover offer needs to be at a fair price and provide a high degree of certainty that it will clear regulatory hurdles, Syngenta chairman Michel Demare said Tuesday, reaffirming the Swiss firm’s opposition to Monsanto’s current proposal.

Monsanto was trying to buy Syngenta “on the cheap” and the board had unanimously rejected the initial approach, Demare said, taking the unusual step of commenting in a video on the company’s YouTube channel.

Demare said the Swiss group can boost profit margins on its own and that the U.S. seeds giant was underestimating regulators’ concerns about a tie-up.

The company would consider sweetened bids but only if they offered more certainty and higher compensation if the deal fails, Demare added.

“Syngenta will be seeking feedback from our largest shareholders in the days ahead,” a spokesman said in a written statement.

Swiss media reports have said there is growing discontent among shareholders about not being consulted sufficiently by Syngenta’s management in the takeover tussle.

Basel-based Syngenta, the world’s largest maker of crop chemicals, rebuffed an initial approach by Monsanto in May, partly on the grounds it did not address regulatory concerns.

It also rejected the US$2 billion Monsanto offered to pay if the merger failed to get approval from regulators after 18 months.

Many analysts have questioned Syngenta’s claim that antitrust remedies proposed by Monsanto were insufficient.

U.S.-based Monsanto, the world’s largest seed company, said last month it plans to divest Syngenta seeds and genetic traits businesses as well as some overlapping chemistry assets to win regulatory approval for a takeover.

Shares trade at discount

Major investors in the Swiss group last month expressed confidence that a deal would come off if the U.S. suitor raises its initial 449 Swiss francs (C$592) per share bid by at least 10 percent.

The shares were up 1.2 per cent at 405.10 francs at 11:15 GMT, with a nine per cent discount to the suitor’s offer reflecting doubt that the deal will come to fruition at the suggested terms.

“Syngenta seems to be asking for both a ‘significantly’ higher offer and a higher break-up fee. This outcome is not impossible,” said Bernstein Research analyst Jeremy Redenius.

Demare said Monsanto was trying to take advantage of a Syngenta share price temporarily dragged lower by weak emerging market currencies and the decline in prices of agricultural commodities to multi-year lows.

He reaffirmed the group’s target of a 2018 margin of earnings before interest, taxes, depreciation and amortization of 24-26 per cent over sales, with cost cutting measures starting to deliver savings “at an accelerated pace”.

Analysts, however, expect a 21.7 per cent margin (EBITDA) over sales on average in 2018, based on five estimates collected by Thomson Reuters, up from 19.3 per cent in 2014.

Monsanto posts third-quarter earnings on Wednesday, where it is expected to talk up a possible combination with Syngenta.

— Oliver Hirt and Ludwig Burger are Reuters correspondents in Zurich and Frankfurt respectively. Addiitonal reporting for Reuters by Joshua Franklin in Zurich.

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