US green light for ChemChina’s Syn­genta pur­chase

The Myanmar Times - - Business -

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.

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 [CFIUS].”

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.

They 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 $465 for each Syn­genta share, plus a spe­cial div­i­dend.

Ini­tially, the com­pa­nies had ex­pected to wrap up the first part of the trans­ac­tion by May 23.

How­ever, the pe­riod has been pro­longed twice as the com­pa­nies wait for the ver­dict of var­i­ous com­pe­ti­tion au­thor­i­ties, which is now set for Septem­ber 13.

There have been few hur­dles to the planned deal in Switzer­land, but it raised more than a few eye­brows in the United States, 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 over the deal.

The sen­a­tors, from both the Repub­li­can and Demo­cratic par­ties, asked that the planned deal be scru­ti­nised 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 led to the re­view by CFIUS, an in­ter-agency com­mit­tee that as­sesses the na­tional se­cu­rity im­pli­ca­tions of for­eign in­vest­ments in US com­pa­nies.

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, last month say­ing it would raise its ini­tial $62 bil­lion of­fer for the com­pany.

And last De­cem­ber, two of the old­est US com­pa­nies, Dow Chem­i­cal and DuPont, an­nounced a tie-up to cre­ate the world’s big­gest chem­i­cal and ma­te­ri­als group, val­ued at $180 bil­lion. –

Photo: EPA

Ren Jianxin (left), chair of ChemChina (China Na­tional Chem­i­cal Cor­po­ra­tion), and Michel De­mare, chair of the board, shake hands af­ter the an­nual press con­fer­ence of Syn­genta in Basel, Switzer­land, on Fe­bru­ary 3.

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