Bloomberg: Ag Groups Call on U.S. to Block ChemChina-Syngenta Deal
Ag Groups Call on U.S. to Block ChemChina-Syngenta Deal
From Daily Report for Executives (also available on Bloomberg Law)
By Casey Wooten
July 22 — Two major food and agriculture groups are calling for federal regulators to block the proposed $43 billion merger between agribusiness giant Syngenta AG and China National Chemical Corp., also known as ChemChina.
Food and Water Watch and the National Farmers Union sent a letter to senior officials of the commerce, agriculture and defense departments, among others, calling for the Committee on Foreign Investment in the United States (CFIUS) to halt the deal, citing economic and national security concerns.
“The proposed takeover of a major seed and agricultural chemical company poses significant potential threats to U.S. security interests; undermines food security in the United States and worldwide; disrupts trade flows; and accelerates the international consolidation of the food and agribusiness industries to the detriment of American farmers, rural communities, and consumers,” the groups said in the letter, dated July 21.
The letter comes as a wave of potential deals hit the agribusiness sector. Shareholders of Dow Chemical Co. and DuPont Co. approved a $59 billion merger July 20. Monsanto Co. and Bayer AG are also negotiating a possible deal.
Though ChemChina is Chinese and Syngenta is based in Switzerland, Syngenta has a significant production and research presence in the U.S.
In a statement, Syngenta spokesman Paul Minehart said the company was in talks with regulators.
“The transaction with ChemChina will ensure continuing choice for growers at a time of industry consolidation,” Minehart said in an e-mailed statement to Bloomberg BNA. “We are having constructive discussions with all regulatory authorities, which reinforce our confidence in closing the transaction by the end of the year.”
In June, ChemChina said it was seeking more time for the U.S. to complete a national security review of the deal (See previous story, 06/15/16).
Major agribusiness deals have also caught the attention of Congress.
The 2013 acquisition of Smithfield Foods by Chinese-owned Shuanghui Intl. led lawmakers to call for more oversight.
Sen. Chuck Grassley (R-Iowa), who sits on the Senate Agriculture Committee, introduced legislation July 12 that would permanently add the Agriculture Department to the CFIUS review process, which oversees international deals that involve large U.S. assets (See previous story, 07/15/16).
The Securing American Food Equity Act would clarify that agricultural assets are critical for national security and CFIUS must take food security into consideration when reviewing the sale of major U.S. assets to foreign buyers.
To contact the reporter on this story: Casey Wooten in Washington atcwooten
To contact the editor responsible for this story: Heather Rothman athrothman
For More Information
Text of the letter is available at http://src.bna.com/g1V.
Text of the Securing American Food Equity Act is at http://src.bna.com/g17.
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