A US watchdog has approved the multibillion-dollar acquisition of Swiss pesticide giant Syngenta by state-owned China National Chemical Corp. The transaction is now expected to close by the end of the year.
The planned $43-billion (38 billion-euro) takeover of Syngenta by ChemChina was approved by the Committee on Foreign Investment in the United States (CFIUS), the two companies said in a joint statement on Monday.
Still, they require approval from a number of other anti-trust regulators around the world, and both firms now expect the transaction to close by the end of the year.
This would be by far the biggest-ever overseas acquisition made by a Chinese firm.
ChemChina announced the mega deal in early February, vowing to dish out $465 for each Syngenta share, plus a special dividend.
Initially, the companies had expected to wrap up the first part of the transaction by May 23, but the period has been prolonged twice as the companies waited for the verdict of various competition authorities now set for September 13.
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.
At the end of March, four members of the US Senate agriculture committee wrote a letter to Treasury Secretary Jack Lew voicing their concerns.
The senators, from both the Republican and Democratic parties, asked that the planned deal be scrutinized for "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."
This led to the review by CFIUS, an inter-agency committee that assesses the national security implications of foreign investments in US companies.
Following Monday's announcement, Syngenta shares rose over 11 percent to around 424.90 Swiss francs (390.70 euros, $441.26) a share.
Syngenta was founded in the year 2000, following the merger of the agricultural segments of pharmaceutical firms Novartis and AstraZeneca.
Before accepting ChemChina's bid, the Swiss company had rejected an offer made by US-based rival Monsanto three times last year.
The takeover comes at a time of growing consolidation in the industry. Last December, two of the oldest US companies, Dow Chemical and DuPont, announced a tie-up to create the world's biggest chemical and materials group, valued at $180 billion. And German chemicals giant Bayer is intent on acquiring Monsanto.
sri/hg (AFP, Reuters, dpa)