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ChemChina to buy Sygenta for 43 bln USD

Reporter: Liu Xin 丨 CCTV.com

08-23-2016 22:20 BJT

The Committee on Foreign Investment in the United States has issued national security clearance for China’s biggest overseas acquisition so far. ChemChina, China’s biggest chemical company, is paying a whopping 43 billion US dollars to acquire Syngenta, a leading agricultural company based in Switzerland. The news has been welcomed by global investors.

In a joint press release, ChemChina and Syngenta announced they had received national security clearance on their proposed transaction from the Committee on Foreign Investment in the United States or CFIUS. Syngenta told CCTV they are now one step closer to successfully bringing the deal to a close. The markets reacted positively upon hearing the news, with Syngenta's share price gaining some 10 percent in both the US and Switzerland.

"It is important because it was the most dangerous one. Because it is based on political ground, so it is not black and white, so it could have gone wrong, now hopefully, it went OK," said Philippe Monnier, Swiss economist.

Syngenta is a leading agricultural company dedicated to improving global food security by enabling farmers to make better use of available resources through science and innovation. It currently employs 28,000 people in more than 90 countries. ChemChina is the largest chemical corporation in China. Its main businesses include materials science, life science, high-end manufacturing and basic chemicals. Its mega offer was unanimously approved by Syngenta’s board last February.

"This is not growth about cost synergies. This is a deal for growth, growth in the sense of commitment to investing long term, innovation, market position and at the end at the same time will open for Syngenta a much better access to china, which is in great need of technology, which we will be able to provide, also attaching to that the best environmental standard so that the whole food security issue in China can be improved," said Michel Demare, chairman of Syngenta.

The transaction is still subject to an anti-trust review by numerous regulators around the world as well as other customary closing conditions. Both companies say they are working closely with the agencies involved and discussions remain constructive. The deal is expected to be finalized by the end of the year.

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