US nod for ChemChina’s deal for Syngenta
Print Edition
A US national security regulator has approved state-owned China National Chemical Corp’s planned US$43-billion takeover of Swiss pesticide and seed giant Syngenta, the two companies said yesterday.
ChemChina and Syngenta said in a joint statement that they had “received clearance on their proposed transaction from the Committee on Foreign Investment in the United States.”
They said a number of anti-trust regulators around the world still need to approve what would be by far the biggest-ever overseas acquisition by a Chinese firm.
The statement said the transaction was expected to close by the end of the year.
ChemChina announced the blockbuster deal in early February, vowing to dish out US$465 for each Syngenta share, plus a special dividend.
Initially, the two companies had expected to conclude the first part of the transaction by May 23, but the period has been prolonged twice as the companies wait for the verdict of various competition authorities, which is now expected to given on September 13.
There have been few hurdles to the planned deal in Switzerland, but it raised more than a few eyebrows in the US, where much of Syngenta’s business is based.
At the end of March, four members of the US Senate agriculture committee wrote a letter to Treasury Secretary Jack Lew voicing their concerns.
The senators, from both the Republican and Democratic parties, asked that the planned deal be scrutinized for “any potential ramifications the purchase may have for American national security, with a specific focus on the potential effects on food security and the safety of our food system.”
This call led to the review by CFIUS, an inter-agency committee that assesses the national security implications of foreign investments in US enterprises.
Syngenta rebuffed US rival Monsanto three times last year before accepting ChemChina’s offer.
The proposed merger is not the only mega takeover planned in the sector as low crop prices push demand down for many agricultural products.
German chemicals and pharmaceuticals giant Bayer is intent on snapping up Monsanto, saying last month it would raise its initial US$62-billion offer for the company.
And last December, two of the oldest US companies, Dow Chemical and DuPont, announced that they were partnering to establish the world’s biggest chemical and materials group, valued at US$180 billion.
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