US approves Chinese mega deal with Swiss company
AFP · 23 Aug 2016, 08:34
Published: 23 Aug 2016 08:34 GMT+02:00
- Board backs ChemChina bid to buy Syngenta (03 Feb 16)
- Monsanto weighs fresh Syngenta takeover bid (18 Nov 15)
- Monsanto drops bid to buy Swiss rival Syngenta (26 Aug 15)
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 23rd, but the period has been prolonged twice as the companies wait for the verdict of various competition authorities, which is now set for September 13th.
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.
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.
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.