From Reuters, Aug. 22:
The European Commission has started an in-depth
investigation of Bayer's planned $66 billion takeover of U.S. seeds
group Monsanto, saying it was worried about competition in various
pesticide and seeds markets.
The deal would
create the world's largest integrated pesticides and seeds company, the
Commission said, adding this limited the number of competitors selling
herbicides and seeds in Europe.
"The Commission
has preliminary concerns that the proposed acquisition could reduce
competition in a number of different markets resulting in higher prices,
lower quality, less choice and less innovation," it said in a statement
on Tuesday.
While the Commission could block
the deal, it has approved others in the industry, such as Dow's tie-up
with DuPont and ChemChina's [CNNCC.UL] takeover of Syngenta - although
only after securing big concessions.
The
Commission said divestments offered by Bayer so far did not go far
enough and that it aimed to make a final decision on the deal by Jan. 8.
"Bayer looks forward to continuing to work
constructively with the Commission with a view to obtaining the
Commission's approval," the German company said in a statement, adding
it still aimed to have the transaction approved by the year end.
Among
individual markets where competition was at risk, the Commission named
Monsanto's weed killer glyphosate, or Roundup, which competes with
Bayer's glufosinate; vegetable and canola seeds, as well as licensing of
cotton seed technology to peers.
A merger
would also reduce competition in the market for the genetic traits
behind herbicide tolerance, which are typically licensed out to
third-party seed companies.
In addition, the
Commission said the deal might slow the race to develop new products,
such as wheat seeds and herbicides against weeds that have grown
resistant to existing products.
DIGITAL AGRICULTURE
More broadly, the regulator also took issue with Bayer's plan to create
combined offerings of seeds and pesticides with the help of new digital
farming tools, which include sensors, software and precision machines....MORE
HT:
TalkingBizNews
