Grassley, other Senators, want full review of ChemChina-Syngenta deal

By Sara Wyant

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WASHINGTON, March 23, 2016 - U.S. Sen. Charles Grassley, R-Iowa, wants a thorough governmental review of ChemChina's expected $43 billion purchase of Syngenta, citing concerns about U.S. food security.

In remarks to reporters on Tuesday morning, Grassley said he was sending a bipartisan letter to U.S. Treasury Secretary Jacob Lew, asking for the Committee on Foreign Investment in the U.S. (CFIUS) to review the purchase. And he wants the U.S. Department of Agriculture and the Food and Drug Administration - who are not normally participants in CFIUS - to weigh in as part of that process.

Lets Talk Food

The letter, which was officially released Wednesday, is signed by Grassley and U.S. Senator Debbie Stabenow, D-Mich., the ranking member of the U.S. Senate Agriculture Committee, and two other committee members, Sherrod Brown, D-Ohio, and Joni Ernst, R-Iowa.

“Constituents have approached us with concerns over this transaction, citing the 2013 CFIUS review of the Shuanghui-Smithfield acquisition. The most common reflection on that experience is that growing foreign investment in U.S. agriculture-and the prognosis of more to come-should be met with a careful review process that captures the issues most relevant to safeguarding the American food system going forward,” the senators wrote. To read the whole letter, click here

“While foreign direct investment is generally positive, careful consideration should be taken, especially if foreign governments are the buyers,” Grassley told Agri-Pulse. “My concerns of concentration and national security are compounded by the fact that the Chinese government - if the Syngenta/ ChemChina deal is approved - would be both a regulator in regard to biotech product approval and also, at the same time, owner of an entity that needs biotech approval.”

Grassley noted that his concerns extend beyond this specific acquisition. Earlier this month, Agriculture Secretary Tom Vilsack expressed similar reservations about seed industry consolidation.

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“Clearly, there's a desire by the Chinese government to acquire agricultural assets that give them access to better food production technology. My concerns for this transaction go beyond the jurisdiction of CFIUS. I remain troubled about the long-term effects of continued consolidation in the seed industry and what that will mean (to) the farmers who have fewer companies to buy seed from,” Grassley said.

In response to the letter, Syngenta spokesperson Paul Minehart said, “We welcome a full review of the transaction by the U.S. government and will continue to work closely with all of the agencies as we move forward in the review process. We believe the proposed combination with ChemChina is good for farmers and customers in the U.S. and all over the world. This transaction is crucial to maintaining choice and competition because it enables us to continue as a leading innovator in seeds, traits and crop protection products, which will preserve the safety, reliability and diversity of the global food supply.”

Minehart said he does not believe the proposed transaction raises any food safety or significant national security issues.

“Syngenta will remain Syngenta. It will retain its broad portfolio of businesses and geographic presence. In the U.S., nothing will change for farmers or customers. Any product commercialized in the U.S. will still be required to meet our own high standards as well as pass all applicable EPA, FDA and USDA health and safety review processes,” added Minehart.

 

After announcing the proposed deal in February, ChemChina and Syngenta voluntarily initiated a CFIUS review. The companies expect to close the deal by the end of 2016.

Updated 3-24-16 at 2:30 pm to add letter, Syngenta reaction.

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