The decision, made at a cabinet meeting on Oct. 19 but not yet made public, marks the first time Italy has vetoed a takeover in the agrifood sector, two officials directly involved in the matter told Reuters.

Rome uses its so-called “golden power” regulation to block undesired bids in industries deemed of strategic importance, such as telecoms, banking and health.

Swiss-based group Syngenta was bought in 2017 for $43 billion by ChemChina, which was folded into Sinochem Holdings Corp earlier this year. It offered around 200 million euros ($232.76 million) to buy Verisem, according to a third source.

Verisem, put on sale by U.S. fund Paine Schwarts and Partners, described itself on its website as a global seed producer with processing facilities located in Italy, France and North America.

Agricultural lobby Coldiretti called on Draghi to block the takeover by Syngenta, arguing it would have shifted to Asia the world’s strategic balance in the control of seeds for vegetable and herb production.

A spokesperson for the Syngenta group declined to comment on what he called “rumours and speculation”. Verisem was not immediately available for comment.

Rome has so far used its golden powers four times since 2012 to block foreign interests in Italy. Three of these beat away Chinese bids, and two have been under Draghi’s eighth-month old government.

Draghi’s administration of national unity in April prevented Chinese company Shenzhen Invenland Holdings Co. Ltd. from buying a controlling stake in a Milan-based firm producing semiconductor equipment.

The government is currently also investigating a sale of a company making high-tech drones for the armed forces to Chinese state-owned investors.

Italy uses its golden power to scrutinise innumerable merger deals, which in most cases are approved with recommendations intended to preserve the national interest.

– Additional reporting by Elisa Anzolin in Milan and John Revill in Zurich.

($1 = 0.8593 euros)

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Syngenta said in a statement Oct. 6 the acquisition positioned its crop protection business as a key player in the biologics sector, which was set to double over the next five years. It gave no financial terms of the buyout.

Valagro serves customers around the world, with a strong presence in Europe and North America and a growing footprint in Asia and Latin America, Syngenta said.

Valagro has more than 700 employees, 13 subsidiaries and eight production sites. Its U.S. arm, now based near Miami, was set up in 2003 under the name Nutrecology, in a joint venture with Lidochem; that operation rebranded as Valagro USA in 2011.

Valagro’s product lines in Canada, which include Megafol and Viva fertilizers and Brexil and Axilo micronutrients, are marketed via the U.S. arm.

The company expects to complete its first U.S. manufacturing site next year at Orangeburg, S.C., about 120 km northwest of Charleston.

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The Swiss company, bought by state-owned ChemChina for $43 billion in 2017, posted a two per cent rise in sales to $12.04 billion for the six months ended June 30, while earnings before interest, tax, depreciation and amortization (EBITDA) increased seven per cent to $2.22 billion (all figures US$).

Syngenta said it had overcome low grain prices, which reduced the ability of farmers to invest in fertilizers and pesticides, and disruptions caused by the COVID-19 pandemic by controlling costs and maintaining supplies.

CEO Erik Fyrwald said an IPO of Syngenta was still being planned.

“The commitment was within five years of when we closed the deal with ChemChina. That was in June of 2017. So mid-year of 2022 would be the five year mark,” Fyrwald told reporters.

“We believe we are on track to achieve that.”

ChemChina, which owns 100 per cent of Syngenta, wants to list the Basel company on China’s technology-focused STAR market, Reuters reported in December.

Syngenta Group, which was created from a merger of Syngenta, Israel’s ADAMA and the agricultural business of Sinochem, is now looking at ways to restructure the debts it took on following the ChemChina takeover.

“We have no specific actionable plan that we want to relate to. But the restructuring of the debt is also at the heart of the IPO,” chief financial officer Chen Lichtenstein said.

The company, which competes with Germany’s Bayer and BASF, said the rest of the year remained “challenging,” although crop prices could rise due to extreme weather events, Fyrwald said.

— Reporting for Reuters by Oliver Hirt, writing by John Revill.

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Chen Lichtenstein, current CEO of Shenzhen-listed crop protection company Adama, which will also be incorporated into the new group, will be nominated chief financial officer of the newly formed Syngenta Group.

He will be based in Basel, Switzerland, the Swiss group said in a statement.

Reuters reported last month that China National Chemical Corp., or ChemChina, had approached Chinese state-backed investors for up to US$10 billion in funding as part of a reorganization of its agrichemicals business ahead of a public float.

The reorganization includes Syngenta, the Swiss pesticide producer that ChemChina agreed in 2016 to buy for US$43 billion.

The fundraising efforts and eventual stock market listing are designed to cut ChemChina’s debt ahead of a long-awaited mega-merger with state-owned peer Sinochem. Frank Ning, the chairman of both companies, has encouraged individual business units to tap capital markets ahead of any tie-up, which has been in the works since 2016.

ChemChina wants to list Syngenta on China’s technology-focused STAR market in mid-2020, according to fundraising documents dated from October.

— Reporting for Reuters by Michael Shields.

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“If I had been the ambassador a year earlier, the takeover wouldn’t have taken place,” Gen Wenbin was quoted as telling the Tages-Anzeiger newspaper, without giving specific reasons for his opposition to the deal.

“It wasn’t a good deal for the Chinese side. It was for Switzerland: It got $40 billion. If Switzerland wants Syngenta back, I would convince ChemChina to sell it. But is there anybody at all in Switzerland who wants Syngenta back?”

Basel-based Syngenta was listed on the SIX Swiss Stock exchange when it was bought by ChemChina, so shareholders received the money from the deal that closed in 2017.

After the takeover spurred debate over foreign countries expanding in Switzerland, Swiss politicians are debating a measure in parliament that could require government approval of sales of Swiss companies to foreign entities.

Other big Chinese investments in Swiss companies include HNA Group’s purchase of airline caterer Gategroup and ground services and cargo handling firm Swissport.

Gen Wenbin said criticism in Switzerland’s media over such transactions had driven potential Chinese investors to look elsewhere.

“They’re going to Germany,” the ambassador told the daily newspaper.

Syngenta did not return a phone call and email seeking comment on Saturday. No one could immediately be reached to comment at the Chinese embassy.

The former Swiss firm is targeting growth through acquisitions in the US$17 billion Chinese seed market, where access is restricted for foreign players, as well as new products and collaborations in technology.

— Reporting for Reuters by John Miller.

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Sources familiar with BASF’s thinking have said that competition regulators looking at potential buyers of antitrust-related assets might favour new entrants to the seed market, such as BASF, over established players to stoke competition in a quickly consolidating market.

“There are assets that will come to market for antitrust reasons and they might come at prices that are different from those that we have seen in the past. That’s why we will look into it and see whether it makes sense for us,” deputy CEO Martin Brudermueller told a news conference at the group’s headquarters.

“Seed assets are an option, not a must,” he added.

Rival Bayer last month said it will sell its LibertyLink-branded seeds businesses, a key part of asset sales required to satisfy competition authorities looking at its US$66 billion Monsanto deal.

BASF, the world’s third-largest maker of crop chemicals, has so far avoided seed assets and has voiced skepticism that a combination of the two businesses would make sense for it.

Instead it has pursued research into plant characteristics such as drought tolerance, which it sells or licenses out to seed breeders.

Rival Syngenta, the Swiss crop protection company acquired by ChemChina, this week vowed to bulk up its seeds business and join the chase for the assets that Bayer must sell.

BASF is the only player left among the top six in a global seeds and pesticides market worth over US$100 billion that has not paired up with a major peer.

— Reporting for Reuters by Ludwig Burger and Patricia Weiss.

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Syngenta, a distant third in the global seeds market behind Monsanto and Dupont, is determined not to lose ground on its rivals as the seeds and crop-protection sector continues an unprecedented wave of mergers and acquisitions.

The Swiss group, the world’s leading crop chemicals maker, itself fought off unwanted suitor Monsanto before agreeing to be taken over by ChemChina to secure better access to Asian markets and is now targeting its own acquisitions and licensing deals.

“We are very interested in seed assets from remedies and beyond that,” CEO Erik Fyrwald told a news conference at the group’s Basel headquarters, responding to a question about assets to be sold by Bayer.

Bayer last month said it will sell its LibertyLink-branded seeds businesses, a key part of asset sales required to satisfy competition authorities looking at the US$66 billion Monsanto deal.

“The goal is to strengthen Syngenta’s leadership position in crop protection and to become an ambitious No. 3 in seeds,” the company said in a news release on Tuesday.

Seeds will be the main plank of the growth strategy to meet ChemChina’s target for Syngenta to double its revenue over the next five to 10 years, the Chinese group said on Tuesday.

ChemChina, which has acquired close to 98 per cent of Syngenta’s shares, also plans to float a minority stake in its newly acquired subsidiary on the stock market in the next five years or so to bolster its balance sheet.

“The timing of the minority IPO of Syngenta will depend on the market situation, but the time frame would be about five years,” ChemChina Chairman Ren Jianxin, now also Syngenta chairman, said at the news conference.

Ren also dismissed as “rumours” reports that ChemChina could merge with state-owned Chinese peer Sinochem.

— Reporting for Reuters by Ludwig Burger.

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The deal, announced in February 2016, was prompted by China’s desire to use Syngenta’s portfolio of top-tier chemicals and patent-protected seeds to improve domestic agricultural output. It is China’s biggest foreign takeover to date.

It is one of several deals that are remaking the international market for agricultural chemicals, seeds and fertilizers.

The other deals in the sector are a US$130 billion proposed merger of Dow Chemical and DuPont, and Bayer’s plan to merge with Monsanto. The trend toward market consolidation has triggered fears among farmers that the pipeline for new herbicides and pesticides might slow. Regulators have required some divestments as a condition for approving the Syngenta deal.

Based on preliminary numbers, around 80.7 per cent of Syngenta shares have been tendered, above the minimum threshold of 67 per cent support, the partners said in a joint statement.

The agreed offer is for US$465 per share. Syngenta shares closed on Thursday at 459 Swiss francs (C$639.64).

The transaction is set to close May 18 after the start of an additional acceptance period for shareholders and payment of a special five-franc dividend to holders of Swiss-listed shares on May 16. Holders of U.S.-listed depositor receipts will get the special dividend in July.

Syngenta shares will be delisted from the Swiss bourse and its depository receipts from the New York Stock Exchange.

CEO Erik Fyrwald played down the transition from publicly-listed group to becoming part of a Chinese state enterprise, stressing that Syngenta would remain a Swiss-based global company while under Chinese ownership.

“It is very important to understand that this is a financial transaction,” he told broadcaster CNBC in an interview.

He saw two major changes: giving Syngenta a long-term shareholder to accompany it during the 12 years it typically takes to discover and launch new products, and helping to overhaul Chinese agriculture, which he called very much behind the global standard.

He said he expected the acceptance rate to easily surpass 90 per cent, with a squeeze-out of remaining shareholders to follow if needed in June.

Funding for the acquisition was clear and irrevocable, while refinancing the company after the transaction closed was still being discussed.

“I am very confident we are going to have a strong balance sheet as agreed,” he said, with an investment-grade rating that would let it pursue market share growth, investments, capital spending and acquisitions.

Syngenta sells its crop protection products in more than 90 countries including Canada under brand names including Axial, Cruiser, Matador and Quadris. It also sells seeds such as cereals, corn, rice, soybeans and vegetables.

ChemChina’s holdings include ag chem manufacturer Adama, which markets mainly off-patent crop protection products in Canada and over 100 other countries.

Among the countries whose regulators’ approval was required, Canada signed off on the Syngenta deal with a “no action” letter from its Competition Bureau in February.

— Reporting for Reuters by Michael Shields. Includes files from AGCanada.com Network staff.

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“This represents a further step towards the closing of the transaction, which is expected to take place in the second quarter of 2017,” they said in a statement.

China’s approval comes without any conditions, Syngenta said in an email.

The deal still requires regulatory approval from India, after U.S. and European Union competition authorities gave conditional approval last week. Canada’s Competition Bureau issued a “no action” letter on the deal in February.

Mexico’s antitrust commission COFECE approved the deal Tuesday, on the condition that Syngenta divests five products in order to avoid risks to competition. The products in question weren’t named.

The deal is one of several reshaping the agricultural chemicals and seeds market, even as such tie-ups prompt fears among some farmers that bigger, more powerful suppliers could push up prices and economize on developing new herbicides and pesticides.

— Reporting for Reuters by Brenna Hughes Neghaiwi.

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The deal is one of several reshaping the agricultural chemicals and seeds market, even as these deals trigger fears among some farmers that bigger, more powerful suppliers could be better placed to push up prices and economize on developing new herbicides and pesticides.

Reuters reported on Feb. 2 that the deal, the largest foreign acquisition by a Chinese company, would be cleared with conditions.

The European Commission said planned asset sales would address its competition concerns.

“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,” European Competition Commissioner Margrethe Vestager said in a statement.

ChemChina will sell a large chunk of its subsidiary Adama’s pesticide, herbicides and insecticides business, its seed treatment products for cereals and sugar beet and a substantial part of its plant growth regulator business for cereals.

American Vanguard (Amvac) said it struck a deal with Adama to acquire three crop protection product lines, without disclosing financial terms.

Bernstein Research analyst Jeremy Redenius said that since Adama focuses on established crop chemicals that have lost patent protection, potential buyers of other assets would likely be from the same industry segment, such as FMC, Nufarm and Sumitomo Chemical.

Redenius added that BASF was unlikely to bid due to its focus on patented substances.

BASF and FMC declined to comment. Australia’s Nufarm and Japan’s Sumitomo were not immediately available for comment outside regular business hours.

Syngenta said the EU’s go-ahead was a major step toward closing the transaction, expected in the second quarter of 2017.

Some of Syngenta’s pesticides will also be put on the block. The world No. 1 pesticides maker sells its products in more than 90 countries under such brand names as Acuron, Axial, Beacon and Callisto. It sells seeds such as cereals, corn, rice, soybeans and vegetables.

U.S. antitrust authorities also nodded the deal through on Tuesday on condition ChemChina divests three products. Canada’s Competition Bureau signed off on the deal in February.

According to a Syngenta spokesperson, the last remaining countries to provide regulatory clearance on the deal include China, India and Mexico.

The EU’s approval came a week after it cleared the US$130 billion Dow Chemical and DuPont merger in return for hefty asset sales, including global research and development facilities.

— Foo Yun Chee is a Reuters correspondent covering competition issues from Brussels. Additional reporting for Reuters by Ludwig Burger in Frankfurt.

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