“We have approved Bayer’s plans to take over Monsanto because the parties’ remedies, worth well over €6 billion euros ($7.4 billion), meet our competition concerns in full,” said Commissioner Margrethe Vestager, the EU’s anti-trust chief.
She said the Leverkusen-based congolmerate had made commitments to dispose of key subsidiaries that overlap with Monsanto.
Vestager said the EU greenlight was subject to rules that ensure that “there will be effective competition and innovation in seeds, pesticides and digital agriculture markets.”
Monsanto accepted an offer from Bayer in September to pay €46 billion to its shareholders and assume €7.3 billion in debt, to create the world’s largest integrated pesticides and seeds company.
In an attempt to appease EU regulators, Bayer announced in October the sale of parts of its agrochemical business to German rival BASF, in a deal worth €5.7 billion.
Earlier this month, BASF also committed to buying Bayer’s vegetable seed business in a last-minute concession to Brussels.”
BASF is the largest manufacturer of chemicals in the world, and at the link above you’ll see what they paid for Monsanto’s seeds business ($7 billion) and the fact that they company has long wanted into the GMO seed business. The corporation will also acquire Bayer’s herbicide business, commercialized under the Liberty, Basta and Finale brands, as well as several parts of its seed businesses in the Americas and Europe.
GM watchers and agroecology groups in Europe are fuming.
‘MEPs slam Commission approval of Bayer-Monsanto deal’, guengl.eu, (European United Left/Nordic Green Left European Parliamentary Group), 21/03/2018
“Today’s Commission approval of Bayer’s acquisition of Monsanto was received with dismay and condemned by MEPs of the Left who warned of the consequences the decision will have on the integrity of the world’s food supply chain and the environment.
The €54bn deal is the latest in a string of mergers and acquisitions in the sector. Dow Chemical recently merged with Dupont and ChemChina acquired Swiss-seed-maker Syngenta.
Kateřina Konečná, member of the European Parliament Committee on Environment, Public Health and Food Safety, lamented the recklessness and disregard for the rights of citizens in the Commission’s decision:
“This is a truly sad day for the EU and the citizens of Europe. Bayer’s acquisition of Monsanto will create an oligopoly whereby three multinational companies will control two-thirds of the global production of pesticides and other agro-chemicals. The world’s biodiversity should not be in the hands of corporations. This signifies a clear shift in power from small and medium-sized farmers to large multinational corporations.”
“This oligopoly will have full control over our food value chain. It will create dependency in agriculture and stifle innovation in the chemicals sector. The Commission is giving a green light to GMOs and pesticides in our food.”
Once the deal is concluded, Bayer-Monsanto may end up controlling nearly a quarter of the world’s pesticides market and together with Dow-Dupont they may control 76 per cent of the market for corn and 66 per cent of the market for soybeans.”
From etcgroup.org March 20: ‘NEWS RELEASE: Europe bows to Bayer-Monsanto… US may follow; Civil society responds with call for a UN Treaty on Competition. a few highlights. They’re the civil society group that had alerted us to the dangers of ‘gene-splicing’ earlier (at the Café and at C99%).
“Acceptance of the deal in Brussels and Washington will likely finalize the last of three mega-mergers that have been in play in the seed and pesticide industries since 2015. Whereas six global companies controlled about two thirds of the global seed market and more than 70% of global pesticides at the beginning of the merger mania, four companies will now be left: Bayer-Monsanto will dominate, followed by Corteva Agriscience (the spinoff agricultural enterprise resulting from last year’s Dow-DuPont merger), and the earlier agreed merger between Swiss-based Syngenta and ChemChina (the acquisitive Chinese chemical company that is expected to soon merge with the still larger Sinochem). The fourth player in the field will be BASF – the well-heeled German giant that is expected to scoop up all or most of the assets Bayer and Monsanto are asked to divest. After the dust settles, the ‘Big Six’ Gene Giants that ruled global seed and pesticide markets for most of this century will become a ‘Fearsome Four’ and will control the same share of the market.
Big Data Deals: At their core, all the mega-merger moves have been about control of big data in agriculture. Big data is behind the new “digital DNA” technologies, including synthetic biology and gene-editing, that are transforming agriculture research as well as so-called ‘precision farming’ platforms. On March 20th, Monsanto’s venture arm announced it was putting US$25 million into a new crop gene-editing company (Pairwise Plants) and establishing Monsanto’s VP of global biotech as CEO. A few weeks ago, Bayer was said to be offering BASF an exclusive license to its digital technology interests. Most recently, there are rumours that, under pressure from the US Department of Justice, Monsanto may even surrender its major digital asset, Climate Corp. which it bought in 2015 for US$930 million.
“If Brussels and Washington think they can appease farmers by getting Bayer-Monsanto sell their assets to BASF, they are wrong,” says Pat Mooney of ETC Group. “There are no conditions under which these three mega-mergers are good for farmers or for world food security – and shifting assets to BASF accomplishes nothing.”
UN Treaty on Competition: ETC Group has been following corporate concentration in agribusiness since 1977 and sees the current mega-mergers as proof that governments are toothless and must negotiate a UN Treaty on Competition. “Regulators around the world are painfully aware that they don’t have the tools to block the current mega-mergers or subsequent wave,” argues Neth Daño of ETC Group.”
Reuters had reported that besides the US, of course, both China an Russia still hadn’t sign on to the merger. Wondering why, I only found sorta/kinda ‘why Russia’ at Bloomberg.com:
“Bayer and Monsanto must still convince U.S. regulators who are pushing for the companies to divest more assets to resolve antitrust concerns, a person familiar with the probe said last week. Bayer is suing the Russian antitrust watchdog over an order [subscribers only link] for it to share technology with Russian companies.
Any U.S. antitrust hesitation is probably “more about timing than about blocking the deal,” Ulrich Huwald, an analyst with Warburg Research in Hamburg, said of reports that the Department of Justice is taking a closer look at the deal. “A political delay.”
Given that Russia has outlawed GMO seeds and products, I have to wonder whassup with that? Wish that story weren’t behind a paywall. But more from Bloomberg:
“BASF is lined up to buy Bayer’s global broadacre seeds and traits, including its research and development operations. The divestment plan covers oilseed rape, cotton, soybean and wheat as well as Bayer’s research on genetically modified traits. BASF will also purchase Bayer’s glufosinate assets and three research lines for herbicides, designed to replace glyphosate, a weedkiller that some European countries are moving to ban.
BASF will also take over Monsanto’s Nemastrike unit to protect seeds from worms. It will license a copy of Bayer’s digital agriculture operations and research pipeline. This will allow “BASF to replicate Bayer’s position in digital agriculture” in Europe, the EU said, and ensure the race “in this emerging field remains open.”
We are positive that the glyphosate Roundup) ‘replacements’ will be far safer™, yes?/s
Now some had posited that the head of the US State Dept. would either approve or deny the merger, but it seems it’s in fact Jeff Session’s Justice Department. And remember, the Tweeter-in-Chief-elect had met with the CEOs of Bayer and Monsanto (Werner Baumann and Hugh Grant) last year over Jobs! Jobs! Jobs! for amerika. Wooot!
But if confirmed, Pompous Pompeo might whisper some sweet everythings into the ear of the DoJ anti-trust chief. He was an author of the ‘DARK act’ back in 2015 try to make it illegal to any mention of GMO labels on food (and declare ‘sole authority to mandate GMO labeling and sets forth particular standards for any label that contains claims that GMOs were or were not used in the production of the food— hampering any attempts by the Food and Drug Administration to pass legislation on the federal level) . It passed the House, must have died in the Senate.
But back to the head of the anti-trust department, Bloomberger says that Bayer may face hurdles (mmm-hmmmm) because:
“The U.S. review is being led by Assistant Attorney General Makan Delrahim, who emerged as an aggressive enforcer after filing a lawsuit to block AT&T Inc.’s takeover of Time Warner Inc. That case is set to go to trial on Monday.
Delrahim has met with Bayer Chief Executive Officer Werner Baumann and Monsanto CEO Hugh Grant. If the companies and the antitrust division can’t reach an agreement that resolves the government’s concerns, the Justice Department could file a lawsuit seeking to block the deal.
In its review of the proposed merger, the Justice Department is looking at horizontal antitrust issues, or competition in the same market, as well as vertical competition, or issues along supply chains, one of the people said.
Delrahim has taken a hard line on resolving vertical competition problems. These have typically been worked out through imposing conditions on how companies operate, but Delrahim has said he is concerned those kinds of fixes require antitrust enforcers to become regulators to monitor compliance. He prefers asset sales to resolve those issues.” (and that the decision could take ‘months’.)
(Not that I know what all of that means exactly…) How are you betting? Myself, I’m quite bullish on the merger getting the Official OkeyDokey because … ♫’money make the world go around…world go around…♪♪, and after all, ‘the bidness of amerika…is bidness’ (h/t molly ivins)
(cross-posted at caucus99percent.com)