Bayer wins US nod for Monsanto deal
German giant to sell assets worth $9bn
WASHINGTON/CHICAGO/BERLIN: Bayer AG won US antitrust approval for its $66 billion takeover of Monsanto Co, clearing the last major regulatory hurdle to forming the world’s biggest seed and agriculturalchemicals provider after a nearly two-year global review.
The companies reached a settlement with the Justice Department on Tuesday that resolves the government’s concerns that the merger as initially structured would harm consumers and farmers.
The agreement requires the sale of assets to BASF SE that Bayer has previously announced. The divestiture package is worth about $9 billion, the largest in a US merger enforcement case.
“America’s farm system is of critical importance to our economy, to our food system, and to our way of life,” Makan Delrahim, the head of the department’s antitrust division, said on a call with reporters. “American farmers and consumers rely on head-to-head competition between Bayer and Monsanto.”
For Bayer, acquiring Monsanto is the last step in a corporate transformation as the 154-year-old company shed its plastics business and remade itself as a life-science company with equally-sized health and agriculture units.
Once the deal is through, three global behemoths will dominate the world’s agriculture industry, a prospect that has left farmers worried about the possibility of higher prices and less choice.
National Farmers Union, the secondbiggest US farmer group, criticised the Justice Department on Tuesday for “continued rubber-stamping” of mergers in food and agriculture.
“This extreme consolidation drives up costs for farmers and it limits their choice of products in the marketplace,” the group said in a statement. “We will now focus our efforts on ensuring the promises made by Bayer and Monsanto throughout this approval process are kept.”
Friends of the Earth, an environmentalist group, criticised the government’s decision to approve the merger, calling it a “toxic mega-merger” that will hurt farmers and consumers.
“The DoJ’s weak divestment requirements will do nothing to stop Bayer-Monsanto from controlling more and more of our food system,” Tiffany Finck-Haynes, senior food futures campaigner with Friends of the Earth, said in a statement.
“This merger will damage the bargaining power of family farmers, prevent farmers from accessing diverse seed varieties, and allow seed prices to rise.”
The settlement came together after Justice Department antitrust officials pressed for significant divestitures to remedy the competition problems from combining the two companies.
The companies have received antitrust approval from most jurisdictions around the world. Bayer expects to receive the approvals it needs from Canada and Mexico in the coming days, according to a statement from the Leverkusen, Germany-based company.
The European Union approved BASF as the buyer of the assets on Tuesday.
Bayer can then close the deal once it has the remaining approvals even though the integration of the two companies won’t happen until the BASF divestitures are finished, which will probably be in about two months.
Monsanto, based in St Louis, said it was pleased with the US approval.
The Monsanto takeover extends a series of tie-ups in the agricultural industry. Last year, US and EU regulators approved two other major deals in the sector, Dow Chemical Co’s merger with DuPont Co and China National Chemical Corp’s takeover of Syngenta AG.
With about $48 billion in sales from their combined businesses, Bayer and Monsanto will surpass those of both DowDuPont Inc and China National.