It is the Commission’s third decision in a short period of time on a merger between two major players in the agrochemical sector. Last year, the Commission had accepted, subject to conditions, Dupont’s acquisition by Dow and ChemChina’s takeover of Syngenta.
As part of an in-depth investigation, the Commission considered that the Monsanto/Bayer operation might significantly reduce competition on price and innovation due to overlaps in the parties’ activities in the seed, pesticide and digital agriculture sectors. It might also contribute to reinforcing Monsanto’s dominant position on certain markets where Bayer is an important competitor thereof.
In response to these concerns, Bayer submitted commitments to divest several aspects of its activity to BASF as well as its R&D organization related to the divested businesses. The European giant notably committed to divest its assets related to glufosinate (herbicide competing with Monsanto’s famous glyphosate). Finally, it committed to grant a license on a copy of its current worldwide offer and its products under development in digital agriculture. Although BASF seems to be a suitable acquirer for the Commission, Bayer will only be able to acquire Monsanto when the Commission has formally authorized the sale of all of the assets to BASF.
With respect to the environmental and food safety concerns raised by a merger of such magnitude, the Commission explained that concentration operations are exclusively analyzed from a competition law point of view. It is therefore to the ecologists’ dismay that the Commission refused to take into account in its analysis issues which it considers reserved for the General Directorate for Health and Food Safety, despite the numerous petitions sent to it.