The EU’s antitrust authorities have approved the US$62.5bn merger of German chemicals company Bayer and American biotech firm Monsanto, which would create a company controlling more than a quarter of the global seed and pesticide market.
The European Commission (EC) determined that Bayer had addressed its concerns about the possible anti-competitive effect of the merger by agreeing to offload a number of assets to its compatriot BASF, Reuters reported on 21 March.
“Our decision ensures there will be effective competition and innovation in seeds, pesticides and digital agriculture markets also after this merger,” Margrethe Vestager, European competition commissioner, said.
“In particular, we have made sure that the number of global players actively competing in these markets stays the same,” she added.
The EC had thoroughly examined more than 2,000 different products markets and 2.7M internal documents and had received more than 1M petitions while drafting its decision, Vestager said.
Bayer had agreed earlier in March to sell €5.9bn (US$7.2bn) worth of seed and herbicide assets, divest its entire vegetable seeds business and give license to its global digital farming data to BASF.
The EU Commission was expected to rule on the BASF deal by 16 April, Reuters said.
The Greens group of the European Parliament criticised the EC’s ruling, saying that smaller players in the agriculture industry could suffer as a result.
“The agriculture industry is already far too concentrated, giving a handful of massive firms a stranglehold on food production. Merging two of the biggest players only makes a bad situation worse,” said Bart Staes, spokesman of the Greens.
The Bayer-Monsanto merger has been approved by China and Brazil, but was still awaiting the green light from the USA and Russia, with the competition authority in the latter having being sued by Bayer for its six-month delay in reaching a decision.
This merger was the latest in a string of acquisitions that has shaken up the global agri industry over the last year, including the mergers of Dow and DuPont, and ChemChina and Syngenta.