CCI gives nod to Bayer, Monsanto merger
The Competition Commission of India (CCI) has given its seal of approval to the mega merger of Bayer AG and Monsanto but with conditions. With CCI’s approval for the $66 billion deal, proposed in September 2016, it is very near final closure and the merged entity is slated to become the world’s biggest seed and pesticides firm.
The Bayer-Monsanto merger will put this agrochemical giant in the league of top groups emerging after consolidation among industry players which controls over two thirds of the sector globally.
Other mergers which were cleared include the DowDupont conglomerate and ChemChina’s acquisition of Syngenta.
CCI, however, stipulated that Monsanto Holdings Pvt Ltd will have to sell its 26 per cent holding in Mahyco Monsanto Biotech India Ltd. According to sources, CCI also stipulated that the “merged entity will have to maintain non-exclusive distribution channels. It will also have to have a policy of broad-based non-exclusive licensing of GM and non-GM traits currently commercialised in India or to be introduced by the combined entity in the future, on a fair, reasonable and non-discriminatory basis.”
Monsanto has major business of GM seeds for cotton crop in India. Currently, the government has restricted the price of GM seeds and even trait fees. Owing to this, Monsanto has put a pause on further investments in India.
According to the sources, CCI stipulated, “The company will also have to grant non-exclusive, non-transferable, non-sub licensable and royalty bearing licenses on fair, reasonable and non-discriminatory terms to its digital farming products and platforms commercialised in India.”.
Bayer Crop Science said in a statement that, “The combination brings together two different but highly complementary businesses. Our combination with Monsanto will create a global leader in agriculture with a broad portfolio, providing superior product offerings and tailor-made solutions to farmers across all crops, in all geographies.”
In India, both Bayer CropScience Limited and Monsanto India Limited are listed on the stock exchange.
Last month, Russian and Chinese regulators approved the merger and EU approved the deal with conditions in March. Bayer has now received approvals for the deal from almost two thirds of the 30 regulatory authorities, including those in Brazil and China, Russia, EU and India. Now, nod from the most important jurisdictions like the US department of Justice and Canada are awaited.
EU has stipulated, among other conditions, that Bayer will have to divest from global field crop seeds business such as canola, cotton, and soybean, the R&D platform for hybrid wheat, the global vegetable seeds business, the global glufosinate ammonium business as well as certain glyphosate-based herbicides in Europe.
Russia’s Federal Antimonopoly Service (FAS) also gave approval on the condition that Russia will receive modern technology from Bayer and Monsanto.