Grassley warns on ChemChina-Syngenta

Chuck Grassley©AP

Chuck Grassley

A $ 44bn Chinese bid for Swiss seeds and chemicals group Syngenta has come under fire from an influential US lawmaker for what he says are concerns it raises about the impact on US food and national security. 

In a radio interview broadcast on Wednesday, Chuck Grassley, the Iowa Republican who chairs the Senate Judiciary Committee, said he was concerned that state-owned ChemChina’s bid for Syngenta would give Beijing ownership of a vital part of the US’s agricultural infrastructure. 


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“Because the food and agriculture sectors are part of the nation’s critical infrastructure this merger raises questions about the potential national security implications,” the veteran senator told an Iowa radio station.

While Syngenta is Swiss-owned, its biotech division is based in the US and is a big player in the US and international markets for genetically-modified seeds, a technology that Beijing has long coveted as it faces the challenge of guaranteeing its own food security. 

The two companies announced the deal in February and said they would be submitting it for approval by the Committee on Foreign Investment in the US, a government panel that reviews purchases of US assets by foreign investors for potential national security implications. 

CFIUS has never rejected a deal on the grounds of food security and lawyers say the ChemChina-Syngenta deal does not raise any obvious national security concerns, although it will be subjected to an obligatory 75-day review because ChemChina is state-owned. 

But the deal, which would be the largest overseas acquisition by a Chinese company, comes amid growing Chinese inbound investment into the US and greater political and regulatory scrutiny that comes with it. 

Mr Grassley is among a growing number of senior US officials who have raised concerns about the deal. Earlier this month, Tom Vilsack, the US agriculture secretary, said he had reservations about the transaction and its impact on US competitors trying to crack the Chinese market.  

Mr Grassley said he was concerned about the increasing consolidation in the seed industry and what that meant for Iowa farmers. But a ChemChina acquisition of Syngenta would also give China even more control over the global market for GM corn, soyabean and other seeds than it already enjoys, he said. 

Because it is the largest US export market for many crops, the decisions Chinese authorities make on approving certain lines of GM seeds have huge commercial implications with many farmers in the US and elsewhere refusing to plant any seeds not approved for sale in China. 

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“My concerns of concentration and national security are compounded by the fact the Chinese government, if the ChemChina-Syngenta 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,” he said. 

In a separate interview with the Wall Street Journal published on Wednesday, Mr Grassley said he would be seeking a formal role for the US agriculture department on CFIUS when it came time to consider the acquisition of Syngenta. The department does not normally take part in such reviews.

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