EU approval of Bayer’s bid for Monsanto reportedly in the offing
The EU Commission’s deadline for the publication of its decision on the merger has already been postponed twice. It is currently scheduled for April 5.
An amalgamated Bayer and Monsanto would create the world's largest integrated pesticides and seeds group. Worth US$62.5bn, the deal is still awaiting approval of the US anti-trust agencies.
Primary concerns
In August last year, at the start of its assessment of the proposed merger, the EU Commission cited preliminary concerns that deal would reduce competition in a number of different markets resulting in higher prices, lower quality, less choice and less innovation, in particular in areas such as pesticides, seeds and traits.
Monsanto makes the controversial pesticide product, glyphosate. Bayer produces glufosinate ammonium, another non-selective herbicide and one of the very few alternatives to glyphosate.
The Commission wanted to also investigate whether competitors' access to distributors and farmers could become more difficult if Bayer and Monsanto were to bundle or tie their sales of pesticide products and seeds, notably with the advent of digital agriculture - the collection of data and information about farms with the aim of providing tailored advice to farmers.
Communication from EU Commissioner for Competition, Margrethe Vestager, indicated she had received more than 50,000 petition emails and more than 5,000 letters opposed to the deal.
As it is, the global farm supplies sector is already heavily concentrated, as illustrated by the recent mergers of Dow and Dupont and Syngenta and ChemChina.
Bayer sees deal closure in Q2 2018
This week, Bayer management board chair, Werner Baumann, note the Brazilian antitrust authorities’ recent green light for the Monsanto acquisition. “That is an important milestone on the road to closing this transaction. After all, Brazil is one of the world’s most important agricultural markets.”
He added that more than half of the around 30 authorities worldwide have now approved the proposed merger.
“Although Bayer is continuing to cooperate closely with the institutions involved, it is becoming evident that the examination procedures will require more time. Our goal now is to be able to close the transaction in the second quarter of 2018.”
To meet anti-trust requirements, Bayer sold part of its crop science businesses to BASF last year. “We have now also committed to divest our entire vegetable seed business. Certain additional business activities of Bayer and Monsanto may also be sold or out-licensed,” said Baumann.
