The
Department of Justice announced this week it has given antitrust approval to
Bayer for its $62.5 billion purchase of Monsanto. The merger of German-based
Bayer, a leading chemical and pesticide company, with St. Louis-based
agri-chemical and seed supplier Monsanto is expected to create the world’s
biggest supplier of seeds and crop protection products.
As part of
the antitrust agreement, Bayer will have to sell off $9 billion in assets to
fellow German chemical company BASF. Bayer agreed to sell BASF its cotton,
canola, soybean and vegetable seed businesses. Bayer will also have to sell its
glufosinate weed killer, which competes against Monsanto’s Roundup.
In addition
to examining the impact on seeds and crop protection products, the DOJ was
concerned about how the merger would impact innovation in the industry. Since
Monsanto has a sophisticated digital agriculture department, Bayer will have to
sell off its nascent digital agriculture business to BASF as well.
DOJ
antitrust chief Makan Delrahim said investigators received "significant
input from farmers, consumer groups and industry stakeholders" as it investigated
the deal.
In addition to the United States, Bayer has
already received approval for the merger from the European Union, Brazil and
Russia. Approvals from Canada and Mexico are still pending. Bayer said it
expects to sell the necessary assets to BASF and begin integrating the
companies in as little as two months.
Bayer’s purchase of Monsanto is the third
major merger that has reshaped the seed and crop protection product industry.
Dow Chemical and DuPont completed a merger last year, spinning off some of its
agricultural assets to other crop protection companies to form the standalone
company Corteva Agriscience,
based in Wilmington, Del. Also last year, Switzerland-based Syngenta AG was
sold to China National Chemical Corp. The Bayer-Monsanto merger is the biggest
of the three.
