26 March 2016 12:00 am
AFP - Top US legislators called Thursday for a national security assessment of a Chinese state company’s planned takeover of Swiss agribusiness Syngenta, pointing to its sizeable US operations.
Senators Chuck Grassley, Sherrod Brown and Joni Ernst, all members of the Senate Agriculture Committee, called for a proactive review of the $43 billion deal by the powerful Committee on Foreign Investment in the United States (CFIUS) with participation by officials from the Department of Agriculture and the Food and Drug Administration.
The review should assess “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,” the senators said in a letter to the Treasury Department, which chairs CFIUS. “Shifts in company governance; operational strategy; or financial health -- particularly in light of the magnitude of this leveraged transaction -- could have consequences for food security,
food safety, biosecurity, and the highly competitive US farm sector as a whole,” they warned. Their letter focused on the February offer by stateowned China National Chemical Corp. or ChemChina, to buy the Swiss company, a leading player in farm science and technology, with market-leading seeds and crop protection products.
The senators also suggested a growing general wariness of Chinese moves to buy US companies. In a separate letter to the Treasury Wednesday, Brown said Chinese investment deals are behind a sharp overall climb in foreign takeovers of US companies. He referred to national security concerns not only about the Syngenta deal but appliance giant Haier’s takeover of General Electric’s appliance division, Chongqing Casin’s bid for the Chicago Stock Exchange, and others in the technology sector. In their letter, the three senators also pointed to the 2013 takeover of Smithfield, the world’s largest pork processor, by China’s Shuanghui group as an additional reason why foreign investment in US agriculture needs “careful review.”
The risk rises when “an acquired US agricultural asset becomes in some part governed by a foreign government with clear strategic interests,” they said, adding that “unpredictable behavior” from foreign owners “is a great challenge for the United States.”