U.S. Lawmakers Scrutinize China's Bid To Buy Agrichemical Giant Syngenta

Enlarge this image toggle caption Waldo Swiegers/Bloomberg via Getty Images Waldo Swiegers/Bloomberg via Getty Images

Glenn Brunkow is a fifth-generation corn and soybean farmer. He and his dad run a small farm about 30 miles from Topeka, Kan.

For more than a decade they've been using seeds and chemicals from Syngenta. The Swiss company is a leader in pesticides and genetically modified seeds.

Recently, Brunkow got a call from his seed dealer to tell him a Chinese state-owned company called China National Chemical Corp., or ChemChina, has made a $43 billion bid to buy Syngenta.

"It was a little disconcerting to hear it the first time," Brunkow says. "Just the idea of a foreign-owned company, especially a Chinese-owned company, coming in." But his seed dealer has urged him not to worry.

The sale is part of a push by China to secure food supply for its population of 1.4 billion people, says Thilo Hanemann, an economist with the Rhodium Group, a research organization. China's agricultural productivity is low, and much of its scarce arable land is heavily polluted. Hanemann says China has not been very successful in nurturing its own genetically modified seed technology, so buying Syngenta will help.

"It's about tapping into the institutional expertise that lies within a company like Syngenta," he says.

The sale, however, is being held up while the U.S. government scrutinizes whether it is a threat to national security. See, although Syngenta is a Swiss company, it does more than a quarter of its business in the U.S. And a sale of this size and involving American agriculture has prompted a review by the Treasury Department's Committee for Foreign Investment in the United States.

"China is doing whatever it can to advance its interests legally and illegally," says Michael Wessel, a member of the U.S.-China Economic and Security Review Commission, which monitors China for Congress.

That's why, he says, CFIUS is bringing in the Department of Agriculture to study the impact of this takeover on U.S. food security, and the Department of Defense is investigating whether any of Syngenta's facilities in the U.S. are close to military bases.

Plus, Syngenta owns a number of agrichemical facilities in the U.S., Wessel notes, and some of them make chemicals that are on the Department of Homeland Security's list of hazardous substances.

Syngenta's chief operating officer, Davor Pisk, says his company and ChemChina have voluntarily handed over pertinent information for these reviews.

For his part, Glenn Brunkow — the Kansas farmer — says he has read and thought about the Syngenta deal a lot. He says he's less apprehensive now that a full review is being done.