The European Commission, EU's executive arm, has approved the acquisition of U.S. seed maker Monsanto by German conglomerate Bayer. Monsanto had agreed to accept Bayer's offer to purchase the company for $66 billion ($128/share) in September 2016 but the deal was pending regulatory approval.
Commissioner Margrethe Vestager, in charge of competition policy, said on Wednesday: "We have approved Bayer's plans to take over Monsanto because the parties' remedies, worth well over €6 billion, meet our competition concerns in full. Our decision ensures that there will be effective competition and innovation in seeds, pesticides and digital agriculture markets also after this merger.
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. And we need competition to push companies to innovate in digital agriculture and to continue to develop new products that meet the high regulatory standards in Europe, to the benefit of all Europeans and the environment."
The deal is the last of three big agricultural transactions that are reshaping the agrochemicals industry. U.S. chemicals giants Dow Chemical and Dupont, and ChemChina and Swiss-based Syngenta had earlier led a wave of consolidation in the sector.
Environmental and farming groups have opposed all three deals, arguing that they severely restrict choice and options for both farmers and consumers in a market already dominated by a few large players.
The Commission received more than a million petitions concerning the latest mega-merger
which would create the world's largest integrated pesticides and seeds group.
“This is a marriage made in hell. The Commission ignored a million people who called on them to block this deal, and caved in to lobbying to create a mega-corporation which will dominate our food supply,” online campaigns group Avaaz legal director Nick Flynn said.
Adrian Bebb of Friends of the Earth Europe said Bayer, Monsanto and BASF will “become data giants in agriculture, the Facebooks of farming, with all the pitfalls that entails”
Konkurrenz Group, a leading law firm specialised in mergers and acquisitions said on its website:
“This merger isn’t just breaking the law, it makes all of our food systems more vulnerable.” The Group warns the merger will lead to fragile monocultures, use of disastrous pesticides and rising food prices”Consumers could also be faced with fewer organic and non-GMO food options.”
Bayer was founded in Barmen, Germany in 1863. The Leverkusen-headquartered company is still best known for making aspirin but was established as a maker of synthetic dyes for textiles before expanding into pharmaceuticals. Over the years the company grew through a series of acquisitions, becoming a drug and chemicals giant.Today, Bayer has annual revenues of 35.015 billion euros and 99,820 employees worldwide.
Monsanto was founded in the St. Louis, Missouri in 1901 to produce saccharine. By the 1940s, the company was producing farm-oriented chemicals. In 1976, it launched probably its most famous product, the weedkiller Roundup. In the 1980s, its scientists were the first to genetically modify a plant cell. Monsanto then started buying other seed companies and began field trials of genetically modified seeds.Today, Monsanto has annual revenues of some $15 billion and some 25,000 employees.
UPDATE 10/04/2018 17:09
According to a news report in the Wall Street Journal, the U.S. Justice Department will allow Bayer’s megadeal to acquire Monsanto after the companies pledged to sell off additional assets to secure government antitrust approval.
With reporting by Reuters, AFP, WSJ