(Bloomberg) -- China National Chemical Corp. is seeking more time for the U.S. to complete a national security review of its planned takeover of Swiss chemical company Syngenta AG, according to two people familiar with the matter.
The companies resubmitted the $43 billion transaction to the government panel that reviews acquisitions of U.S. businesses by foreign investors, said the two people, who asked not to be named because the process is confidential. The Committee on Foreign Investment in the U.S., which can recommend to the president that transactions be blocked if they pose a risk to national security, has a maximum of 75 days to complete reviews. Refiling restarts that clock.
Syngenta, which got more than a quarter of its revenue last year from seeds and crop protection in North America, would help transform state-owned ChemChina into the world’s biggest supplier of pesticides and agrochemicals. The bid comes amid a record wave of Chinese investment that has prompted U.S. officials to consider claims that some of the acquisitions could threaten national security.
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The companies haven’t said whether they hit resistance from the panel over possible security risks or need more time to negotiate changes to the deal to resolve any concerns. ChemChina and Syngenta also haven’t divulged when they refiled with the committee, which could also clear the deal without changes.
Investigations by CFIUS, which is led by the U.S. Treasury Department and includes officials from the Defense, State and Homeland Security departments, are confidential. The panel doesn’t comment on active reviews.
A group of farm-state senators in March called on Treasury to closely scrutinize the Syngenta takeover, saying it could affect food security and safety as well as the U.S. farm sector. CFIUS cleared the purchase of pork producer Smithfield Foods Inc. in 2013 by China’s Shuanghui International Holdings Ltd., despite similar concerns.
Representatives for ChemChina and Syngenta declined to comment.
Syngenta Chief Executive Officer John Ramsay said in April that the deal was on track and should close by the end of the year.
Other recent China deals have unraveled amid CFIUS reviews: In January, Dutch company Royal Philips NV said it was canceling the sale of its lighting-components business to a Chinese-led consortium because of concerns from the panel, which investigated its U.S. operations. The next month, Western Digital Corp.’s plan to sell a 15 percent stake to China’s Tsinghua Unisplendour Corp. fell apart after the investment faced an investigation by CFIUS.
Basel-based Syngenta has several research and production facilities in the U.S. The proximity of those sites to sensitive U.S. facilities like military bases could draw scrutiny from the panel.
Among other facilities in the U.S., Syngenta has a crop-protection manufacturing plant in St. Gabriel, Louisiana -- about 80 miles from the U.S. Naval Air Station Joint Reserve Base at Belle Chasse, Louisiana. Proximity to that base caused CFIUS to bar Cnooc Ltd., China’s biggest offshore oil and natural gas producer, from operating oilfields in the Gulf of Mexico under an agreement allowing Cnooc to acquire the U.S. assets of Canadian energy company Nexen Inc., Bloomberg News reported at the time.
The 75-day CFIUS review timeline is split between an initial 30-day period followed by an additional 45-day investigation if needed. It isn’t uncommon for complicated deals to require more time, forcing companies to restart the process.
Lenovo Group Ltd. and International Business Machines Corp., for example, had to refile with CFIUS in 2014 when Lenovo was buying IBM’s low-end server unit. That deal was eventually cleared.
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