New | ChemChina clinches US security approval to buy Swiss seeds giant Syngenta

China National Chemical Corp. received approval from US national security officials for its takeover of Swiss agrochemical and seeds company Syngenta AG, seen as the biggest regulatory hurdle that the US$43 billion acquisition faces.

The Committee on Foreign Investment in the US (CFIUS) has cleared the transaction, the companies said in a statement on Monday. The deal, expected to be completed by the end of the year, is still subject to antitrust review by regulators worldwide, according to the statement.

“The CFIUS approval removes a major potential hurdle and should come as a relief to Syngenta shareholders,” said Christian Faitz, an analyst at Kepler Cheuvreux.

Shares of Syngenta jumped as much as 13 per cent. Since announcing the deal in February, the stock has traded below ChemChina’s bid price amid investor concerns that regulators in the US might block the deal. The takeover is leading a record wave of Chinese acquisitions that has prompted US officials to consider claims that some purchases could threaten national security.

Syngenta, which got more than a quarter of revenue last year from seeds and crop protection in North America, would help transform state-owned ChemChina into a global pesticide and agrochemical giant.

CFIUS, which is led by the Treasury Department and includes officials from the Defense and State departments, reviews acquisitions of US businesses by foreign investors for risks to American security and can recommend that deals be blocked. The committee often imposes conditions on transactions before clearing them, such as restricting the foreign company’s access to parts of the US business.