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posted by takyon on Thursday August 25 2016, @07:52PM   Printer-friendly
from the chemical-compound dept.

The Committee on Foreign Investment in the United States, a U.S. government committee which assesses the potential effect of foreign investment on that country's security, has given its approval for the proposed purchase of the Swiss seed and chemical manufacturer Syngenta by China National Chemical Corp., also known as ChemChina.

Coverage:

Previously:
ChemChina to Purchase Syngenta For $43 Billion in China's Largest Foreign Acquisition


Original Submission

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ChemChina to Purchase Syngenta For $43 Billion in China's Largest Foreign Acquisition 7 comments

In recent years, Monsanto has tried to purchase the Swiss agricultural chemical giant Syngenta AG. Less than 6 months ago, Syngenta rejected a $47 billion takeover offer (with a $3 billion reverse break-up fee) from Monsanto.

Now Syngenta has agreed to a $43 billion cash buyout by the Chinese government-owned China National Chemical Corporation (ChemChina). The deal would be the largest foreign acquisition ever by a Chinese company:

The offer comes after months of uncertainty over the future of Syngenta, which was earlier pursued by U.S. seed giant Monsanto Co. To seal the deal, the companies must now overcome potentially fraught regulatory hurdles in the U.S. and elsewhere.

If completed, the purchase would mark a fresh high for Chinese overseas acquisitions. Chinese companies — with the strong support of their government — have sought to gain technology and know-how from abroad, while also opening up new markets to drive sales overseas as demand at home slows.

For Syngenta, the deal holds the prospect of new capital and greater access to the huge China market, while for ChemChina, it gives the company access to Syngenta's advanced biotechnology for developing seeds.

Previously: Dow and DuPont Plan Merger to Create $130 Billion Temporary Chemical Giant


Original Submission

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  • (Score: 0) by Anonymous Coward on Thursday August 25 2016, @09:14PM

    by Anonymous Coward on Thursday August 25 2016, @09:14PM (#393193)

    America continues economic terrorism through regulatory pressure.

  • (Score: 2) by bob_super on Thursday August 25 2016, @09:41PM

    by bob_super (1357) on Thursday August 25 2016, @09:41PM (#393203)

    After Trump becomes president, that evil chinese company's rejection will mean one less competitor in the US market.

    I need to find a way to make some profit, before the inflation spike.

  • (Score: 2) by dingus on Thursday August 25 2016, @10:43PM

    by dingus (5224) on Thursday August 25 2016, @10:43PM (#393224)

    so, an American board has to approve of a sale from a Swiss company to a Chinese firm? Why do they need approval?

    • (Score: 0) by Anonymous Coward on Thursday August 25 2016, @10:48PM

      by Anonymous Coward on Thursday August 25 2016, @10:48PM (#393226)

      The EU keeps messing with Microsoft and Google. Why shouldn't the US mess with EU companies?

    • (Score: 0) by Anonymous Coward on Thursday August 25 2016, @11:02PM

      by Anonymous Coward on Thursday August 25 2016, @11:02PM (#393230)

      I was going to give a pithy "well, 51% ownership by a US company" or something like that... but a quick online search came up with nothing. So great question... why does the US regulators have any say in this? The only thing I can think of is if they threaten to stop the company from selling to the US entirely, but that doesn't seem to be what is happening.

      • (Score: 1) by Francis on Friday August 26 2016, @04:51AM

        by Francis (5544) on Friday August 26 2016, @04:51AM (#393339)

        If they're wanting to do business in the US, then they need US regulatory approval. Being outside the US does not exempt corporations from antitrust laws for anything they do within the US.

        That being said, let's be honest, this is a rubber stamp. Worst case scenario they'll have to make promises to sweeten the deal and after the deal is approved they just don't follow through on any of it. It's not like those promises have ever been stuck to by other corporations.

    • (Score: 4, Insightful) by Pherenikos on Thursday August 25 2016, @11:06PM

      by Pherenikos (1113) on Thursday August 25 2016, @11:06PM (#393231)

      Considering both Chinese and EU regulators are regularly having to approve mergers between foreign companies which do substantial amounts of business in their respective territories, needing US regulators to sign off on a merger which will have a significant US presences is only natural. If you don't want local regulatory approval divest your local business.

      • (Score: 2) by dingus on Thursday August 25 2016, @11:21PM

        by dingus (5224) on Thursday August 25 2016, @11:21PM (#393237)

        This is a good comment, but FYI Switzerland isn't in the EU. It's in the Schengen Area, which is a much looser agreement.

    • (Score: 2) by butthurt on Thursday August 25 2016, @11:18PM

      by butthurt (6141) on Thursday August 25 2016, @11:18PM (#393235) Journal

      I don't understand it either. However, I see that Syngenta does business in the U.S. or has a U.S. subsidiary:

      http://www.syngenta-us.com/home.aspx [syngenta-us.com]

      Article I of the U.S. constitution says

      The Congress shall have power [...] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; [...]

      which, in practice at least, applies to agribusiness (see Wickard v. Filburn).

      Ceasing to do business in the U.S. would be an unpalatable option, because it's a huge market for agrichemicals and such.

      As noted in one of the articles, the proposed merger is also subject to approval in other countries. The U.S. has a lot of clout in this matter though.

  • (Score: 2) by butthurt on Thursday August 25 2016, @11:26PM

    by butthurt (6141) on Thursday August 25 2016, @11:26PM (#393238) Journal

    It needs to say something like "U.S. Regulator Approves ChemChina-Syngenta Merger" because the arrangement has not been approved [thevillagessuntimes.com] by the U.S. Department of Justice. Sorry for the error.