‘Syngenta’ helps humanity face its toughest challenge: how to feed a rising population, sustainably. They apply world-class science and the most productive research and development in the industry to achieve a step change in agricultural productivity. In more than 90 countries around the world, their employees enable millions of farmers to improve global food security by making better, more sustainable use of available resources.
With Syngenta’s $12 Billion in annual sales Not profits, the Chinese government is using the company ChemChina to ensure food security by creating such mega mergers . here is the extract from nyt.com:
LONDON — The Chinese government wants to make sure its food supply is reliable and safe as it works to feed a rapidly growing middle class. So it was a coup on Wednesday when a Chinese company won approval to take over one of the world’s largest suppliers of seeds and pesticides.
By clearing the deal with European Union regulators, China National Chemical Corporation is close to the $43 billion takeover of Syngenta, the Swiss farm chemical and seed company. It would be the largest Chinese takeover of a foreign company and is one of three proposed mergers in a stop-and-go international race seeking greater influence over the world’s food supply.
“China has been trying to develop its own seed industry — and agricultural chemicals as well — for decades, and the progress has been slow,” said Fred Gale, a senior economist at the United States Department of Agriculture. “This is an attempt to upgrade productivity.”
The deal between China National Chemical Corporation, a state-owned company known as ChemChina, and Syngenta comes as trade relations between China and the West have become increasingly tense. The situation has been made worse by President Trump’s sharp talk on the issue.
Syngenta’s clearance from the European Union is part of an international competition that includes Dow Chemicals and DuPont, who are still working to close their merger. Though best known as chemical companies, Dow and DuPont, both based in the United States, also have huge agricultural businesses.
Bayer AG, the German industrial conglomerate, is also trying to complete its multibillion takeover of Monsanto. That deal would give Bayer control of the company most closely associated with the rise of genetically modified foods.
And ChemChina’s takeover of Syngenta would give Beijing more influence over many of the seeds and chemicals it needs to feed its swelling population.
If all three deals are completed, they would reshape the global agricultural chemical business, reducing competition in the industry.
It is an important play for China, which has struggled to maintain and upgrade its food supply in recent years. China hopes to better feed its increasingly affluent population, but several food scandals have made Chinese citizens suspicious of domestic supply chains.
Those scandals have fueled anxiety about genetically modified food, even as China wants to use the science to increase production. Although China has poured money into research, it still bans cultivation of genetically modified food for human consumption, and knowledge about genetically modified organisms is limited.
The ChemChina deal could bolster China’s efforts to become a major player in genetically modified food. But Mr. Gale said Chinese consumers would probably remain wary.
“The general public has become very suspicious of seeds,” he said. “That will be an obstacle to Syngenta becoming a pipeline for G.M.O. seeds in the China market.”
ChemChina will have to sell prized assets to take control of Syngenta.
To appease European officials, it must sell substantial parts of its European businesses that make pesticides and substances that stimulate or slow plant growth.
“It is important for European farmers and ultimately consumers that there will be effective competition in pesticide markets, also after ChemChina’s acquisition of Syngenta,” Margrethe Vestager, the European Union commissioner in charge of competition policy, said in a statement. “ChemChina has offered significant remedies, which fully address our competition concerns.”
The European Union granted its approval a day after ChemChina received the go-ahead from the United States Federal Trade Commission. The F.T.C.’s approval hinged on ChemChina selling parts of a subsidiary’s business in the United States to an agricultural chemical company based in California. The Committee on Foreign Investment in the United States, which focuses on national security issues and was also regarded as a significant potential obstacle, cleared the deal in August.
The ChemChina deal for Syngenta is part of a spate of consolidation in the agricultural chemical industry globally, as companies have tried to meet the challenge of falling crop prices.
Their efforts to win new customers are being made more difficult by consumer resistance. Widespread suspicion of genetically modified foods in Europe means that protests against Monsanto can draw thousands, and several European countries ban their cultivation.
The approval of antitrust agencies would be seen as promising for others seeking deals, said Dale Stafford, the head of mergers and acquisitions for the Americas at Bain & Company, a business consultancy.
“This sends a strong signal that even though there needs to be concessions, with the right strategic deals, they can happen,” Mr. Stafford said.
The ability to complete another agricultural chemicals deal, however, could be diminished by the huge deals that have been done.
“As markets get more concentrated, the impact on competition gets amplified,” said Elai Katz, who leads the antitrust practice at the law firm Cahill Gordon & Reindel. This could make it harder to get deals past agencies or to find buyers for divestitures.
In recent years, Chinese companies have been on an acquisition binge, buying major strategic assets like copper mines and oil deposits, and investing in flashier, if less economically or geopolitically important, deals for marquee names like the Waldorf Astoria hotel in Manhattan.
Lately, there have been signs that the shopping spree might be ending. China has tightened limits on how much money it is allowing past its borders, and that has threatened purchases that some Chinese officials have criticized as frivolous.
Far fewer overseas acquisitions by Chinese companies have been announced this year than by this time a year ago. The value of these deals has also fallen to about $31 billion this year compared with $87 billion at the same point last year, according to Dealogic, the financial data company.
American and European companies alike have criticized China’s ambitious plan to build up its own technology industries, which the overseas businesses worry could create global competitors and potentially weaken their business in the big Chinese market.
And in the United States, takeover watchdogs have blocked several deals that they say could affect national security, while some lawmakers are calling for even tighter reviews.
Yet Chinese companies have shown a willingness to be aggressive when it matters. And for China, food matters.
“On one hand they want to have the best technology, but at the same time they don’t want their markets to be dominated by international companies like Monsanto, Dupont or Bayer,” Mr. Gale said. “So that’s the fastest way to do it, buy the technology. That seems to be China’s strategy now.”
Regards from April.