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Business / Companies

ChemChina's takeover 'poses no security issues'

By Paul Welitzkin in New York (China Daily) Updated: 2016-03-26 09:21

CFIUS is tasked with reviewing foreign acquisitions of US companies and consists of representatives from 16 agencies, including treasury, homeland security and defense.

Grassley's comments are part of a growing trend among some US lawmakers to have CFIUS play an expanded role in reviewing potential transactions, particularly those coming from China.

The organization has never rejected a deal on the grounds of food security. Nevertheless, it will be subjected to an obligatory 75-day review because ChemChina is State-owned.

Although based in Switzerland, Syngenta is the biggest seller of pesticides in North America, from where it gets nearly a quarter of its revenue, and a major seller of seeds.

Its US headquarters is in North Carolina, and it has other facilities in several states, including California, Delaware, Iowa, Louisiana, Nebraska and Minnesota.

Michael Wessel, a member of the US-China Economic and Security Review Commission, which was created to monitor China for Congress, has insisted there are food safety risks for the US to consider in the ChemChina-Syngenta deal, and agrees with Grassley in wanting the Agriculture Department to be involved in CFIUS's review

"The potential risks to US food safety from the Syngenta transaction send a strong signal that the USDA (US Department of Agriculture) needs to be integrated into CFIUS' review of this transaction.

"Syngenta's leading role in the seed-technology sector requires a thorough review. Food security is a national security issue," said Wessel in an e-mail.

However, David Miller, director of research and commodity services for the Iowa Farm Bureau Federation, does not believe a change in ownership should raise food-safety issues.

Emma Gonzalez contributed to this story.

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