Italy vetoes sale of seed producer to Chinese-owned Syngenta, officials say

Rome uses its so-called "golden power" regulation to block undesired bids in industries

  
Image used for illustrative purpose. Genetically modified corn are seen cultivated at a greenhouse in Syngenta Biotech Center in Beijing, China, February 19, 2016.

Image used for illustrative purpose. Genetically modified corn are seen cultivated at a greenhouse in Syngenta Biotech Center in Beijing, China, February 19, 2016.

REUTERS/Kim Kyung-Hoon

ROME- Italy has prevented Chinese-owned group Syngenta from buying vegetable seed producer Verisem, government officials said, underscoring Prime Minister Mario Draghi's commitment to shield key assets from unwanted foreign bids.

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.

($1 = 0.8593 euros)

(Additional reporting by Elisa Anzolin in Milan and John Revill in Zurich, editing by Gavin Jones and David Evans) ((giuseppe.fonte@thomsonreuters.com; +390680307711;))


More From Markets