ChemChina clinches US security nod for Syngenta purchase

[WASHINGTON] China National Chemical Corp. received approval from US national security officials for its US$43 billion takeover of Swiss chemical company Syngenta AG.

The Committee on Foreign Investment in the US, has cleared the transaction, the companies said in a statement. The deal, expected to be completed by the end of the year, is still subject to antitrust review by regulators worldwide, according to the statement.

Syngenta, which got more than a quarter of its revenue last year from seeds and crop protection in North America, would help transform state-owned ChemChina into a global pesticide and agrochemical giant.

The bid is leading a record wave of Chinese acquisitions that has prompted US officials to consider claims that some purchases could threaten national security.

CFIUS, which is led by the Treasury Department and includes officials from the Defense and State departments, reviews acquisitions of US businesses by foreign investors for risks to American security and can recommend to the president that deals be blocked.

The committee often imposes conditions on transactions before clearing them, such as restricting the foreign company's access to parts of the US business.

Approval by CFIUS may trigger criticism in the US. A group of farm-state senators in March called on Treasury to closely scrutinise the Syngenta takeover, saying it could affect food security and safety as well as the US farm sector.

In June, Senator Chuck Grassley, a Republican from Iowa, called the deal "concerning" and said the US needs to consider "strategic questions" before approving the sale of agricultural assets to foreign governments.

Reuters earlier reported the expected clearance earlier, citing unidentified people.

BLOOMBERG