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European Commission Clears Bayer’s Acquisition of Monsanto, Subject to Conditions
The European Commission (EC) has given its approval to Bayer’s acquisition of Monsanto. EC has approved under the EU Merger Regulation the acquisition of Monsanto by Bayer. The merger depends on divestiture of an extensive remedy package, which addresses the parties' overlaps in seeds, pesticides, and digital agriculture, according to an EC news release.
"We have approved Bayer’s plans to take over Monsanto because the parties’ remedies, worth well over €6 billion, meet our competition concerns in full,” said Commissioner Margrethe Vestager, in charge of the EC’s competition policy in the EC news release. “Our decision ensures that there will be effective competition and innovation in seeds, pesticides, and digital agriculture markets also after this merger. In particular, we have made sure that the number of global players actively competing in these markets stays the same. That is important because we need competition to ensure farmers have a choice of different seed varieties and pesticides at affordable prices. And we need competition to push companies to innovate in digital agriculture and to continue to develop new products that meet the high regulatory standards in Europe, to the benefit of all Europeans and the environment.”
The EC assessed more than 2,000 different product markets and reviewed 2.7 million internal documents in its review. It concluded that the transaction as notified would have significantly reduced competition on price and innovation in Europe and globally on a number of different markets. The Commission also had concerns that it would have strengthened Monsanto’s dominant position on certain markets, where Bayer is an important challenger of Monsanto.
The commitments submitted by Bayer address these competition concerns in full:
- They remove all of the parties’ existing overlaps in seed and pesticide markets, where concerns were raised, by divesting the relevant Bayer businesses and assets.
- They cover Bayer’s global R&D organization for seeds and traits as well as Bayer’s research activities to develop a challenger product to Monsanto’s glyphosate. They also cover certain Monsanto assets, which in future would have competed with a Bayer seed treatment against nematode worms.
- Bayer committed to grant a license to its entire global digital agriculture product portfolio and pipeline products to ensure continued competition on this emerging market.