Takeover of Syngenta: resistance in the USA
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ChemChina wants to take over the Basel agribusiness Syngenta for US$43bn. According to a report by the Swiss Landwirtschaftliche Informationsdienst (Lid) opposition to the takeover is building in the USA. The Neue Züricher Zeitung (NZZ am Sonntag) reported that Senator Chuck Grassley (Iowa) submitted a bill on 12 July with the aim of preventing the takeover of Syngenta by the Chinese state-owned firm ChemChina.
In order to achieve his objective Grassley wants the Ministry of Agriculture to be given a permanent seat on the Committee on Foreign Investment in the United States (CFIUS). With officials from various departments, this committee examines whether the sale of US firms to foreign investors consitutes a danger to national security. The US committee feels the takeover comes within its remit because a large part of Syngenta's seed business takes place in the USA.
The NZZ am Sonntag quotes a political adviser in Washington as saying that if the Ministry of Agriculture becomes a permanent CFIUS member it means food security is an important element in national security.
Chuck Grassley's reason for putting forward his proposal: transactions taking place today will influence food production over the coming decades. He said that who controls the food production of tomorrow is a question of strategic importance. Food security affects national security.
Moreover, Syngenta is currently experiencing significant falls in turnover and profit - 7% less turnover and 13% less profit in the first half-year are not only a consequence of lower demand but also the strength of the dollar.
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