EU opens investigation into Bayer takeover of Monsanto

BRUSSELS, Aug 22, (AFP): The European Commission said Tuesday that it was opening an in-depth investigation into the proposed $66 billion (56-billion-euro) takeover of US seed and pesticide supplier Monsanto by Germany’s Bayer, citing concerns it could reduce competition in key products for farmers.

“Seeds and pesticide products are essential for farmers and ultimately consumers,” said EU Competition Commissioner Margrethe Vestager.

“We need to ensure effective competition so that farmers can have access to innovative products, better quality and also purchase products at competitive prices.”

In its own statement, Leverkusenbased Bayer said it “believes that the proposed combination will be highly beneficial for farmers and consumers.”

The firm “will continue to work closely and constructively with the European Commission” and still aims to receive approval for the deal by the end of the year, it added.

After a months-long pursuit in which it raised its offer price several times, Bayer won over Monsanto’s management in September for the deal, which would create the world’s largest integrated pesticides and seeds company.

If the tie-up goes ahead, the new company would have some 140,000 employees around the world with combined annual revenues from agriculture alone of about 23 billion euros.

But the deal has drawn criticism from environmental groups because of Monsanto’s long history of promoting genetically modified crops.

“There’s not much to investigate. One monster corporation controlling our food is a bad idea for farmers and citizens everywhere,” said Nick Flynn of the Avaaz advocacy group.

“Over a million people are hoping Commissioner Vestager comes back with a long-term rejection of Monsanto and Bayer’s marriage from hell.”

The European Commission expressed concern that Bayer produces one of the few alternatives to glyphosate, an herbicide that Monsanto markets under the name Roundup, one of the most widely sold weed-killers in Europe.

It also said that both companies have large market shares in vegetable seeds and in several field crops where their products compete against one another.

The European Commission added that Bayer was one of the few competitors to Monsanto in several markets for developing traits in plants, such as tolerance to herbicides.