A U.S. national security regulator has approved a state-owned China National Chemical Corp.’s planned $43-billion (38 billion-euro) takeover of Swiss pesticide and seed giant Syngenta, the two companies said Monday. Syngenta derives about a quarter of its sales from North America.
ChemChina first announced its plan to purchase Syngenta in February.
In a statement, the firms didn’t mention any concessions required, but they did say they expect to close the deal later this year as they work to receive anti-trust approval from authorities around the world.
Following Monday’s announcement, Syngenta saw its share price soar 11.58 percent in mid-morning trading to 424.90 Swiss francs a piece, as the Swiss stock exchange’s main SMI index swelled just 0.69 percent. “Obviously it is very interested in securing food supply for 1.5 billion people and as a result knows that only technology can get them there”.
If completed, the deal would be the biggest foreign acquisition to date by a Chinese company.
Several U.S. lawmakers wrote to Treasury Secretary Jacob Lew earlier this year asking for CFIUS to subject the deal to additional scrutiny over its impact on domestic food security.
Syngenta is a key player in the market for pesticides and seeds.
German chemicals and pharmaceuticals giant Bayer is intent on snapping up Monsanto, last month saying it would raise its initial $62-billion offer for the company.
Syngenta said earlier this year it would make a voluntary filing with CFIUS “even though no obvious national security concerns were identified during due diligence”.
Analysts had been watching for a decision from the Committee on Foreign Investment in the US, or CFIUS, a government body with the power to block deals that it deems a threat to the nation’s security, because a quarter of Syngenta’s sales come from North America. The U.S. Department of Agriculture also joined the CFIUS review, Reuters previously reported. It has other facilities in North Carolina, as well a presence in California, Delaware, Iowa and Minnesota, among other states.