On 21 March 2018, the European Commission announced it had cleared, after in-depth review and under conditions, the acquisition by a pharmaceuticals, consumer health, agriculture and animal health company headquartered in Germany (the “Acquirer”) of an agriculture company headquartered in the United States (the “Target”). The proposed acquisition was notified to the Commission on 30 June 2017. The Commission opened its in-depth investigation in August 2017 because of concerns that the proposed transaction could significantly reduce competition in a number of markets.

The Commission identified competition concerns with regard to seeds and traits (modifications to a seed genome, making it resistant to pests or tolerant to certain herbicides), pesticides and digital agriculture. The assessment of more than 2,000 product markets and 2.7 million internal documents led to the conclusion that competition would be reduced on a number of different markets and raised the concern that the Target’s dominant position would be strengthened on certain markets, post-transaction.

The Commission was also initially concerned about innovation in biological pesticides and bee health. In addition, since the company would hold the largest portfolio of pesticides products and the strongest global market positions in seeds and traits, the Commission was concerned about potential bundling of seeds and pesticides. These initial concerns were not confirmed by the in-depth investigation.

In order to address the remaining competition concerns, the parties had to offer a number of commitments to which the Commission approved. These commitments aim, in particular, to keep the same number of global players. Specifically, the Acquirer should divest the entirety of its vegetable seed business together with its research and development (“R&D”) organization, almost its entire global broadacre seeds and trait business together with its R&D organization, and its glufosinate assets and three lines of research for non-selective herbicides. Additional commitments were subsequently modified to include a divestment of certain seed treatment assets and products of the Acquirer and its global digital agriculture assets and products.

For the main part of the remedy package, the commitments identified a buyer. For the remaining remedies, a buyer was not indicated in the commitments but, subsequently, the same one has been proposed. It is interesting to note that during its review, the Commission cooperated with several other competition authorities worldwide, such as the US Department of Justice and the Australian, Brazilian, Canadian, Chinese, Indian, and South African competition authorities.