ChemChina-Syngenta $43 Billion Deal Approved by US Security Panel – Wall Street Journal

Updated Aug. 22, 2016 3:26 a.m. ET

Government-owned China National Chemical Corp. SYT -0.36 % , known as ChemChina, said Monday that a U.S. national-security regulator had cleared its planned $ 43 billion acquisition of Swiss seed company Syngenta AG SYT -0.36 % , removing one of the deal's biggest potential hurdles.

The deal, which marks the most ambitious foreign takeover attempt by a Chinese company to date, is still subject to antitrust and other regulatory reviews.

Analysts had been watching for a decision from the Committee on Foreign Investment in the U.S., or CFIUS, a government body with the power to block deals that it deems a threat to the nation's security, because a quarter of Syngenta's sales come from North America.

The proposed ChemChina acquisition is part of a record foreign spending spree by Chinese companies. In the year to date, Chinese companies have signed a record $ 159.2 billion in overseas deals. This has surpassed the full-year 2015 record of $ 105.7 billion and is more than triple the amount from two years ago, according to Dealogic.

Buying Syngenta would give ChemChina a foothold in the U.S. and the opportunity to expand the Swiss company's business in China and other emerging markets. Syngenta's intellectual property is also attractive as the Swiss company develops genetically engineered seeds that might help further open the tightly regulated Chinese market for biotech crops.

ChemChina and Syngenta said Monday that they expect the deal to close by the end of the year. Shares of Syngenta were recently up 11% in Zurich.

The deal came after months of uncertainty over the future of Syngenta, which had been previously pursued by U.S. seed giant Monsanto. MON 0.15 % A merger of DuPont Co. DD 0.48 % and Dow Chemical Co. DOW 0.36 % is also set to consolidate the global seed and pesticide sector.

ChemChina, headed by entrepreneur Ren Jianxin, is one of China's most aggressive acquirers of foreign companies.

China's central government has encouraged acquisitions overseas to help domestic majors secure resources and technology that can be used to fuel the country's growth.

When ChemChina said last year that it was acquiring Italian tire maker Pirelli & C. SpA for about $ 7.7 billion, it quietly secured funding from an overseas investment vehicle championed by Chinese President Xi Jinping.

Write to Kathy Chu at kathy.chu@wsj.com