EC clears Bayer's acquisition of Monsanto subject to conditions
Staff Writer |
The European Commission has approved under the EU Merger Regulation the acquisition of Monsanto by Bayer.
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The merger is conditional on the divestiture of an extensive remedy package, which addresses the parties' overlaps in seeds, pesticides and digital agriculture.
The decision follows an in-depth review of Bayer's proposed acquisition of Monsanto. Monsanto is the world's largest supplier of seeds, which generates most of its sales in the US and Latin America.
Monsanto also sells glyphosate, which is the most used pesticide worldwide to control weeds.
Bayer is the second largest supplier of pesticides worldwide, with a stronger focus in Europe. It is also an important globally active seeds supplier for a number of crops. The transaction creates the largest global integrated seed and pesticide player.
As part of its in-depth investigation, the Commission has assessed more than 2,000 different product markets and reviewed 2.7 million internal documents. It concluded that the transaction as notified would have significantly reduced competition on price and innovation in Europe and globally on a number of different markets.
the Commission concluded that the divestment package enables a suitable buyer to sustainably replace Bayer's competitive effect in these markets and continue to innovate, for the benefit of European farmers and consumers.
Bayer has proposed BASF as purchaser for the remedy package. The Commission's assessment is ongoing whether a) the divestiture to BASF meets all purchaser requirements, and b) whether it creates any problematic overlaps or raises other competition concerns (see further below).
Bayer and Monsanto can only implement the transaction when the Commission has completed its review of the proposed buyer.
The Bayer/Monsanto transaction is the third in a row in the seeds and pesticides sector. In line with its case practice, the Commission assesses transactions taking place in the same industry according to the so-called "priority rule" - first come, first served.
The assessment of the merger between Bayer and Monsanto has been based on the market situation following the Dow/DuPont merger and the ChemChina/Syngenta merger, taking the remedies in both cases into account.
When it comes to seeds and pesticides there are of course other vital concerns that go beyond competition policy, including consumer protection, food safety and ensuring the highest standards for the environment and the climate.
The strict national and European regulatory standards on these matters will remain just as strict after this merger as before it and continue to apply. ■