Seed World

ChemChina-Syngenta Deal One Step Closer

Earlier this week, the Committee on Foreign Investment in the United States cleared the proposed acquisition of Syngenta by China’s National Chemical Corporation, more commonly known as ChemChina.

According to reports, it’s increasingly likely that the largest foreign acquisition by a Chinese company will go through. In response, Senator Chuck Grassley (R-Iowa) announced a late September hearing to discuss increasing consolidation in the seed and chemical industries in the Senate Judiciary Committee.

Syngenta is confident that the deal will close by the end of the year, but also recognizes that the deal is still subject to anti-trust review by numerous regulatory around the world and other customary closing conditions.

Reuters reports that the next hurdle the deal must clear is an anti-trust review by the European Union.

Foreign Investment in Agriculture

Concerned about foreign investment, Senator Chuck Grassley introduced the Securing American Food Equity (SAFE) Act in early July to permanently add the U.S. Department of Agriculture to the CFIUS review process and clarify that agricultural assets are considered critical national security infrastructure that CFIUS must consider before it approves the sale of any major U.S. food and agriculture companies.

“We’re seeing more and more foreign investment in our agriculture assets, and it’s something we need to be very aware of,” Grassley says. “The transactions that are occurring today will shape the food industry for decades to come. We need to be thinking strategically about who will control our food supply tomorrow. Food security is national security.”

The review process completed by the Committee on Foreign Investment in the United States is a voluntary system of notification by investors. Firms largely comply with the provision, because foreign acquisitions that do not notify the committee remain subject indefinitely to divestment or other actions by the president. Upon receiving written notification of a proposed acquisition, merger, or takeover of a U.S. firm by a foreign investor, the process can proceed.