On Wednesday 21 March, the European Commission conditionally approved the acquisition of the US company Monsanto by Germany's Bayer.
The acquisition, which has made waves among civil society, illustrated in particular by campaigns carried out by environmental protection NGOs (see EUROPE 11846, 11895), was notified to the European Commission on 30 June of last year, before becoming the subject of an in-depth investigation launched by the institution on 22 August (see EUROPE 11845).
The Commission had concerns of a possible competition distortion in the pesticides, seeds and agronomic traits sectors, on a market that is already oligopolistic. The Commissioner for Competition, Margrethe Vestager, also told a press conference following the publication of the decision in question that the planned operation as initially presented would have significantly reduced competition on these market segments, particularly in terms of innovation.
The significant corrective measures, worth a total in excess of €6 billion, offered by the companies have answered our concerns in terms of competition, Vestager added, hinting that the decision was made on the basis of economic considerations rather than environmental ones. Today's decision, she explained, would make it possible to maintain innovation and continue to give farmers a choice of products and suppliers. She also said that her services had received millions of petitions, emails and letters in protest against the transaction.
Commitments. First of all, Bayer has undertaken to remove all existing overlaps between the two companies' activities on the markets for seeds (vegetables, field crops and field crop characteristics) and pesticides (glufosinate in particular). It will do this by selling off certain activities and assets of the German company.
Concerning research, Bayer will also sell off research activities for the production of non-selective herbicides, to ensure that products are developed to rival Monsanto's glyphosate. For its part, the US giant will shed assets concerning seed treatment, to ensure effective competition with Bayer's activities.
Finally, Bayer will have to get rid of a licence for its entire global portfolio of products relating to digital agriculture and related products being developed, which will also help to ensure genuine competition on this market segment.
BASF a potential buyer of activities to be sold off. In the framework of its commitments, Bayer has proposed that BASF acquire most of the corrective measures, specifically the seed and field crop characteristics activities, pesticides and the digital economy digital agriculture.
The Commission takes the view that BASF could be an appropriate buyer in the framework of the operation in question. It is not active in the sale of seeds or non-selective herbicides, which means that competition will not be limited. It is also present on the pesticides market and is sufficiently financially solid to be competitive on these market segments.
However, the institution has not given its definitive blessing to the acquisition at this stage, as it is waiting for Bayer and BASF to present additional evidence, for instance concerning BASF's capacity to become a serious rival to the entity that will result from the merger between Bayer and Monsanto. Once this evidence has been supplied, the Commission will assess it and may approve the merger.
Reactions. Reactions were not long in coming in, following the publication of the Commission's decision. In a press release, Bayer's CEO, Werner Baumann, welcomed the decision, hailing it a major success and significant turning point.
In the opposite corner, Bart Staes (Greens/EFA, Belgium) said that the operation was bad news for farmers, the environment and food security. Friends of the Earth, which is extremely active on this dossier, said that the forthcoming merger was a marriage made in hell – bad for farmers, bad for consumers and bad for our countrysides. (Original version in French by Lucas Tripoteau)