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From Antitrust Law Daily, March 21, 2018

EC gives conditional approval to Bayer’s acquisition of Monsanto

By Jeffrey May, J.D.

Bayer AG’s proposed acquisition of Monsanto Company received conditional approval from the European Commission (EC) today. The EC is conditioning the acquisition, valued at more than $60 billion, on "an extensive remedy package, which addresses the parties' overlaps in seeds, pesticides and digital agriculture." Bayer has proposed BASF as the main purchaser for the remedy package, according to the announcement.

The EC said that, in fashioning relief, it took into account the fact that the Bayer/Monsanto transaction is the third in a row in the seeds and pesticides sector. The assessment of the merger between Bayer and Monsanto was based on the market situation following the Dow/DuPont merger and the ChemChina/Syngenta merger, taking the remedies in both cases into account, it was noted.

Bayer, headquartered in Germany, describes itself as global enterprise with core competencies in the Life Science fields of health care and agriculture. Agrochemical company Monsanto is based in the United States.

The EC conducted an in-depth investigation of the transaction and identified competition concerns. To resolve these concerns, the parties have agreed to divest Bayer’s entire vegetable seed business and almost the entirety of Bayer's global broadacre seeds and trait business. In addition, with respect to pesticides, Bayer has committed to divest to BASF its glufosinate assets and three important lines of research for non-selective herbicides, while Monsanto’s nematode seed treatment assets would also be divested. As for digital agriculture, Bayer agreed to license a copy of its worldwide current offering and pipeline on digital agriculture to BASF, allowing BASF to replicate Bayer’s position in digital agriculture in Europe, according to the EC.

U.S. Department of Justice review. Meanwhile, on the other side of the Atlantic, the U.S. Department of Justice Antitrust Division has been conducting its own review of the deal. The EC noted its cooperation with the Justice Department and other competition authorities in the investigation.

Federal lawmakers have been closely monitoring the acquisition. A number of Senate Democrats sent a letter last year to Attorney General Jeff Sessions, calling for a "thorough and impartial analysis" of the deal. 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."

Bayer said in a statement today that it is working closely with the Justice Department. The company also noted that it has received approvals for the transaction from substantially more than half of the some 30 regulatory authorities, including those in Brazil and China.

Companies: Bayer AG; Monsanto Co.

MainStory: TopStory Antitrust AcquisitionsMergers AntitrustDivisionNews

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