Insecticide is sprayed under an avocado tree to ward off Oriental fruit flies at a farm in Homestead, Florida, in this Sept. 9, 2015 photo. (Photo : Getty Images)
The U.S. Department of Agriculture (USA) has agreed to join the U.S. government panel reviewing state-owned ChemChina’s proposed $43 billion acquisition of Swiss seeds and pesticide manufacturer Syngenta AG, people familiar with the matter told Reuters in an exclusive report on Monday.
The move, which will put the deal under increased government scrutiny, comes after several U.S. lawmakers urged Treasury Secretary Jacob Lew in March to request for the USDA to be involved in the review so that the potential impact of the deal on domestic security could be better assessed, the report said.
Lew heads the Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security threats and is composed of representatives from 16 U.S. agencies, including the Department of the Treasury, Homeland Security, and Defense.
The Treasury declined to comment on the review, with a spokesperson saying: "By law, information filed with CFIUS may not be disclosed by CFIUS to the public. Accordingly, the department does not comment on information relating to specific CFIUS cases, including whether or not certain parties have filed notices for review."
A USDA spokeswoman also declined to comment, citing the same reasons.
Syngenta declined to comment as well.
A spokesman for China National Chemical Corp., also known as ChemChina, did not respond to a request for comment from Reuters.
Although the USDA is not one of the agencies that compose CFIUS, there has been a precedent of it participating in the review of a deal. In 2013, CFIUS gave the green light for China-based Shuanghui International Holdings Ltd. to purchase U.S. meat company Smithfield Foods Inc. with the USDA's participation.
Syngenta said earlier this year that it would voluntarily file with CFIUS for its deal with the Chinese state-owned firm "even though no obvious national security concerns were identified during due diligence."
Announced in February, the deal marks the largest foreign acquisition by a Chinese company, with China looking to secure food supplies for its burgeoning population.
Syngenta, which is headquartered in North Carolina and earns nearly a quarter of its revenue from North America, is the biggest seller of pesticides in the region as well as a key supplier of seeds. Aside from its facilities in North Carolina, the company also has a presence in California, Delaware, Iowa and Minnesota, among other states in the U.S.
