China’s Big Foreign Takeover Running Into Problems In The US
Last month a $43 billion dollar deal was announced between the State-owned ChemChina and Switzerland’s Syngenta, a seed and pesticide company. However, in the US the sale of Syngenta- who supplies farmers with seeds and runs research and production facilities- to ChemChina, has alarm bells going off. If this deal goes through it will be the largest overseas takeover ever by a Chinese corporation.
Sen. Chuck Grassley of Iowa, is worried that the merger could impact US food security and distribution; the Republican Senator feels the deal may create conflict of interest with the Chinese government because they would both regulate biotech products and own the company that makes them. US Secretary of Agriculture, Tom Vilsack, is watching the deal carefully as well. His concern is based on how China regulates foreign biotech products. He says that biotechnology and innovation are often impeded by politics (that’s rich coming from any government official in this country) and not based on science (another head shaker from someone who has abandoned sound science for Monsanto).
The deal is not done yet though. The Committee on Foreign Investment in the United States(a Treasury-led regulatory body) still has to sign off on the sale of US firms to foreign investors. And just recently, US tech company Western Digital called off a plan to take a $3.8 billion dollar investment from a Chinese firm because the same Treasury committee had decided to investigate(it seems this committee is one government body that gets things done).
But this deal isn’t the only worrisome one on the books. Just last month, dozens of lawmakers sent a letter to the committee about the planned sale of the Chicago Stock Exchange to a Chinese company. There is concern that Chongqing Casin Enterprise Group has ties to the Chinese government and therefore the Chinese military.
Chinese companies are currently on a global buying binge; to date they have spent $104 billion dollars in foreign deals, 98% of what was spent in 2015.
Source: CNN Money
