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)”.
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“We are not disclosing the details of the agreement with CFIUS to respect the confidentiality of the process”, a Syngenta spokesman said by email in response to a Reuters query.
Syngenta reiterated that is expected the deal to be finalized by the end of the year.
CFIUS, which is led by the Treasury Department and includes officials from the Defense and State departments, reviews acquisitions of USA businesses by foreign investors for risks to American security and can recommend to the president that deals be blocked.
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.
Shares in Swiss agribusiness group Syngenta have risen 12% after its takeover by ChemChina was given the go-ahead by a USA regulator. Both companies are working closely with the regulatory agencies involved and discussions remain constructive.
Syngenta, which got more than a quarter of its revenue past year from seeds and crop protection in North America, would help transform state-owned ChemChina into a global pesticide and agrochemical giant. They cited the potential for “risks to our food system” and the USA agriculture industry.
Approval by CFIUS may trigger criticism in the U.S. It comes as China looks to secure food supplies for its population.
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.
Syngenta is a key player in the market for pesticides and seeds. Syngenta’s shares subsequently fell to about 20% below that because of concerns that CFIUS would not clear the deal. It has other facilities in North Carolina, as well a presence in California, Delaware, Iowa and Minnesota, among other states.
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The Committee on Foreign Investment in the US, has cleared the transaction, the companies said in a statement.
