A US national security panel has cleared ChemChina's $43 billion takeover of Swiss pesticides and seeds group Syngenta, the companies said, boosting chances that the largest foreign acquisition ever by a Chinese company will go through.

The decision removes significant uncertainty over the takeover of the world’s largest pesticides maker after the two companies agreed a deal in February. Syngenta shares jumped 11 per cent in early trading to 422.60 Swiss francs (€388), while ChemChina’s offer valued the company at about 448 francs at current exchange rates plus a special five-franc dividend. Kepler Cheuvreux analyst Christian Faitz called the step a “major milestone for the deal”, adding in a note to clients that “approval removes a major potential hurdle and should come as a relief to Syngenta shareholders”. Kepler Cheuvreux rates Syngenta shares a “buy”.

Security implications

Reuters had reported earlier on Monday that the acquisition was in the final stages of being cleared by a US panel that scrutinises deals for national security implications.

"China National Chemical Corporation (ChemChina) and Syngenta today announced that the companies have received clearance on their proposed transaction from the Committee on Foreign Investment in the United States (CFIUS)," a joint statement released by Syngenta said. The statement made no mention of any concessions required to win clearance, and the company did not immediately respond to requests by phone and email for additional comment.

Syngenta reiterated that is expected the deal to be finalised by the end of the year. “In addition to CFIUS clearance, the closing of the transaction is subject to anti-trust review by numerous regulators around the world and other customary closing conditions. Both companies are working closely with the regulatory agencies involved and discussions remain constructive.

Reuters