European Commission clears Bayer’s $62.5bn Monsanto buy
The European Commission has approved Bayer’s $62.5 billion acquisition of agrochemical company Monsanto, subject to conditions.
Yesterday, March 21, the European Commission cleared the transaction, which will create the “largest global integrated seed and pesticide player”.
As part of the Commission’s conditions, Bayer will divest its entire vegetable seed business, including its research and development organisation, in a bid to address the parties’ overlaps in seeds, pesticides and digital agriculture.
Bayer has already reached a deal to divest almost the entirety of its global broadacre seeds and trait business to BASF.
In addition, Bayer will sell glufosinate assets and three important lines of research for non-selective herbicides to BASF, along with providing a licence of its current offering and pipeline on digital agriculture to BASF.
The deal with BASF is currently being investigated by the European Commission, which is due to rule on the transaction by April 16.
Commissioner Margrethe Vestager, in charge of competition policy, said: “Our decision ensures that there will be effective competition and innovation in seeds, pesticides and digital agriculture markets also after this merger.”
The assessment of the merger was based on the market situation following two major mergers in the industry: the Dow/DuPont merger and ChemChina/Syngenta.
In April last year, the European Commission and the US Federal Trade Commission cleared the merger of generic pesticide producer ChemChina and crop business Syngenta.
One month before this, the Commission cleared the Dow/DuPont merger, after DuPont agreed to divest major parts of its global pesticide business.
“In particular, we have made sure that the number of global players actively competing in these markets stays the same. That is important because we need competition to ensure farmers have a choice of different seed varieties and pesticides at affordable prices,” added Vestager.
The US Department of Justice’s (DoJ) antitrust division said that it will continue with its review of the merger.
In a statement, the DoJ noted that the effects of the transaction in Europe may differ from its impact in the US.
“For example, while genetically modified seeds are largely prohibited in Europe, they are widely used throughout the US,” it said.
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