European antitrust regulators have opened an investigation into Bayer’s $56 billion deal with Monsanto, a transaction that would create the world’s largest integrated pesticides and seeds company
The letter to the public about the Bayer-Monsanto merger from Margrethe Vestager, the commissioner in charge of European competition policy, is here:
http://ec.europa.eu/competition/mergers/cases/additional_data/m8084_4719_6.pdf
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Bayer-Monsanto deal faces deeper scrutiny in Europe
By CHAD BRAY
New York Times, AUG 22, 2017
https://www.nytimes.com/2017/08/22/business/dealbook/bayer-monsanto-eu.html
[links to sources are at the URL above]
European antitrust regulators opened an in-depth investigation on Tuesday into Bayer’s $56 billion deal for Monsanto, a transaction that would create the world’s largest integrated pesticides and seeds company.
Bayer, a German chemicals multinational, announced last year that it planned to buy Monsanto, its American agribusiness rival, but it was only this past June that it sought approval from the European authorities. The regulators had previously indicated that they would scrutinize such a deal.
“Seeds and pesticide products are essential for farmers and ultimately consumers,” Margrethe Vestager, the commissioner in charge of European competition policy, said on Tuesday in a news release. “We need to ensure effective competition so that farmers can have access to innovative products, better quality and also purchase products at competitive prices.”
In a letter to the public, Ms. Vestager said the commission had received more than 50,000 emails and more than 5,000 letters and postcards, as well as Twitter posts, expressing concerns about the transaction.
Ms. Vestager said that many of the comments expressed concern about potential negative effects of Monsanto and Bayer products, including risks to human health, food safety and consumer protection. She said the companies would be bound by “strict rules” in place to address those issues.
“While these concerns are of great importance, they do not form the basis for a merger assessment,” she said in her letter.
The Bayer-Monsanto combination is the latest in a series of mergers in the rapidly consolidating seed and agrochemical sector.
In March, European authorities approved, with conditions, a plan that would merge Dow Chemical and DuPont and then split the combined company into three.
Less than a month later, they approved the acquisition of the Swiss agribusiness company Syngenta by China National Chemical Corporation, on the condition that ChemChina sell significant parts of its European pesticide and plant growth-regulator business.
The European competition authorities conducted similar in-depth reviews of both of those transactions.
Bayer said it would continue to “work constructively” with the European Commission.
The company said in a news release that it “had expected further review of the proposed acquisition of Monsanto due to the size and scope of the transaction,” adding: “Bayer believes that the proposed combination will be highly beneficial for farmers and consumers.”
Bayer offered concessions last month, but the European authorities said on Tuesday that those commitments were “insufficient” to resolve their doubts about the transaction.
The European regulators said they would further investigate whether the deal would restrict competitors’ access to distributors and farmers, particularly if the two companies were to bundle together their sales of pesticide products and seeds. The European authorities have until Jan. 8 to issue a decision on the inquiry.