Top US legislators on Thursday called for a national security assessment of a Chinese state company’s planned takeover of Swiss agribusiness Syngenta AG, pointing to its sizable US operations.
Senators Chuck Grassley, Sherrod Brown and Joni Ernst, all members of the Senate Agriculture Committee, called for a proactive review of the US$43 billion deal by the powerful Committee on Foreign Investment in the United States (CFIUS) with participation by officials from the US Department of Agriculture and the US 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 US 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 said.
Their letter focused on last month’s offer by state-owned China National Chemical Corp (ChemChina, 中國化工) 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 US Treasury on 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 Group’s (海爾) takeover of General Electric Co’s appliance division, Chongqing Casin Enterprise Group’s (重慶財信) 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 Foods Inc, the world’s largest pork processor, by China’s Shuanghui International (雙匯國際) 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.”
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