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From Antitrust Law Daily, July 24, 2017

Democratic senators ask for 'thorough' and 'impartial' review of Bayer-Monsanto tie-up

By Jeffrey May, J.D.

Seventeen U.S. senators, led by Amy Klobuchar (D-Minn.) and Jeff Merkley (D-Ore.), are urging the Department of Justice Antitrust Division to conduct a "thorough and impartial analysis of Bayer AG’s proposed $66 billion acquisition of Monsanto Company." In a July 21 letter to Attorney General Jeff Sessions, the senators said that "the Antitrust Division must remain independent of political influences and carefully consider the impact this merger will have on agricultural businesses, farmers, and consumers."

Consolidation in the agrochemical industry. The combination of Bayer and Monsanto is one of a handful of deals announced over the last year or so that has raised concerns about consolidation in the agrochemical industry. The recently-approved merger of Dow Chemical Company and E.I. DuPont de Nemours & Co. is another. A proposed final judgment, requiring the divestiture of multiple crop protection and two petrochemical products resolved Justice Department competition concerns about that $130 billion deal.

"The agri-business industry has already experienced significant consolidation," the senators contended. They noted that a U.S. Department of Agriculture study found that, between 1994 and 2009, crop-seed prices more than doubled relative to the price farmers received for agricultural commodities.

The senators expressed concern that the Justice Department settlement in the Dow-DuPont case did not include any divestures or other relief in the seeds or traits markets. "The industry appears to be moving towards three or four large vertically integrated companies that may have little incentive to compete with each other or support smaller companies that are not similarly integrated," according to the letter.

Independent review. The Bayer-Monsanto tie-up also is on the radar of these Democratic senators because the companies’ CEOs were among industry leaders who met with President-elect Donald J. Trump while their deals were pending review by the Antitrust Division. Bayer CEO Werner Baumann and Monsanto CEO Hugh Grant met with President-elect Trump and discussed their transaction. In light of these developments, the senators are calling for an independent review.

The letter noted that Klobuchar asked Sessions, during his confirmation hearing before the Senate Judiciary Committee in January, about the need for the attorney general to act independently when considering antitrust cases and to avoid political influence. Klobuchar, who serves as ranking member of the Senate Judiciary Committee’s antitrust subcommittee, also reiterated concerns about the meetings between Trump and corporate executives when the Judiciary Committee approved the nomination of Makan Delrahim to be Assistant Attorney General in charge of the Antitrust Division in June.

We encourage the Antitrust Division to work with the Department of Agriculture to evaluate the impact that this deal will have on competition in the agricultural inputs market and on farmers who work every day to feed our world, the senators concluded.

Companies: Bayer AG; Monsanto Co.

MainStory: TopStory Antitrust AcquisitionsMergers AntitrustDivisionNews FedTracker TrumpAdministrationNews

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