Bayer gets antitrust approval from U.S. Justice Department for its $62.5 billion acquisition of Monsanto

The combined company will control more than a quarter of the world’s seed and pesticide market.

With the U.S. Justice Department giving the green signal to Bayer AG’s bid to acquire Monsanto Co for $62.5 billion deal, with both companies agreeing to sell more assets to win the antitrust approval, shares of Monsanto, the world’s biggest seed company, touched their four-year high at $125.15.

The acquisition will create a company which will control more than a quarter of the world’s seeds and pesticides market.

The souring of the global agriculture economy has triggered a spate of consolidations among the big players, which have drawn ire from farming and environmental groups which are concerned about their diminished market power.

In its report, citing sources familiar with the matter at hand, the Wall Street Journal stated, in recent days, the U.S. Justice Department had reached a deal with Bayer and Monsanto wherein Bayer had agreed to sell additional seed and treatment assets to BASF SE and in addition has agreed to make concessions related to digital agriculture.

The acquisition reduced competition for sales of seeds and chemicals to farmers who are struggling with low crop prices, which raises the risks of price gouging, said Wenonah Hauter, executive director for Food & Water Watch, an advocacy group.

“The Justice Department’s paltry divestment approach does little to address the extreme control the merged firm will have over farmers’ data, genetics, biotechnology traits or the associated agrichemical industry,” said Hauter.

Although Bayer declined to comment on the report it stated it expects to close the acquisition later in the second quarter.

A spokeswoman for BASF could not immediately be reached for comment.

Monsanto and the Justice Department declined to comment.

In its quarterly earnings report last week, Monsanto had stated it was confident of receiving antitrust approval from the U.S. as well as other regulatory approvals.

Incidentally, Monsanto did not host its usual conference call with analysts to discuss the earnings because of the pending merger.

Already Bayer has received approval for the acquisition from the EU, Australia, Brazil and China.

Categories: Creativity, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy, Sustainability

Tags: , , , , , , , , , , , , , , , , , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: