MOSCOW (MRC) -- Bayer has received the green light from the EU to buy Monsanto on Wednesday, after promising to sell off substantial parts of its business, clearing a major hurdle to the last of a trio of mega-mergers consolidating the global agrochemical industry, reported Financial Times.
The German company promised to sell some of its herbicide and seeds businesses to rival BASF to alleviate the watchdog’s concerns that the tie up with the giant American agribusiness would cut competition in the EU and lead to higher prices, lower quality, a cut in choice and less product innovation. Bayer will also license BASF its digital farming portfolio.
Margrethe Vestager, EU competition commissioner, said: "We have approved Bayer’s plans to take over Monsanto because the parties’ remedies, worth well over EUR6 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."
BASF agreed to buy Bayer’s non-selective herbicide business and some of its seeds business in October for EUR5.9bn, and has recently agreed a further purchase of its rival’s vegetable seed business for around EUR1.5bn. European authorities are considering the competition implications of these sales to BASF.
The approval comes less than a week after Monsanto shares fell on the reports that American antitrust officials at the Department of Justice may have concerns with the deal. While a difference opinion is possible, it is unlikely as American and European antitrust officials work closely when considering global mergers of this scale.
"The EU Commission and the DOJ will have been coordinating closely in their reviews," said Chris Cook, antitrust partner at lawyers Cleary Gottlieb. "The European commission took a more hawkish position than DOJ on the Dow/DuPont (merger), so it would be surprising now if DOJ were the more aggressive agency here."
Bayer’s agreement to buy Monsanto for USD66bn in September 2016 was the third of three mega-mergers in the agri-chemical and seed industry.
The other two deals, the merger of Dow and DuPont and the purchase of Syngenta by ChemChina, were approved by Ms Vestager last year after in-depth reviews but only after both companies promised to sell substantial parts of their business to allay concerns that each of those deals would cut competition.
Ms Vestager said she received thousands of emails, postcards, letters and tweets "expressing concerns about the proposed acquisition which raised concerns about food safety, consumers, the environment and the climate".
She responded: "While these concerns are of great importance, they cannot form the basis of a merger assessment", rather they are dealt with by European and National regulators.
As MRC informed before, in September 2017, Monsanto accepted an increased takeover bid of USD128/share from Bayer, paving the way for Bayer to acquire Monsanto in an all-cash transaction valued at USD66 billion.
Bayer is a global enterprise with core competencies in the fields of health care, agriculture and high-tech polymer materials. As an innovation company, it sets trends in research-intensive areas. Bayer's products and services are designed to benefit people and improve their quality of life. At the same time, the Group aims to create value through innovation, growth and high earning power. Bayer is committed to the principles of sustainable development and to its social and ethical responsibilities as a corporate citizen.
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