European Union to investigate $66B Bayer-Monsanto deal

European Union to investigate $66B Bayer-Monsanto deal

The European Commission has started an in-depth investigation of Bayer's planned $66 billion takeover of USA seeds group Monsanto, saying it was anxious about competition in pesticide and seeds markets.

It throws a spanner in the works for German pharma giant Bayer, which had been courting the USA crops and seeds specialist for months before reaching a deal with Monsanto last September.

The commission said it had concerns that the merger could reduce competition in pesticides, seeds and traits.

The European Commission, concerned with potential antitrust aspects of the deal, gave a minimum deadline of January 8, 2018, to complete the review.

It comes amid a series of global deals that have effectively shrunk the agribusiness market, including ChemChina's $44bn (£34bn) takeover of Syngenta and the $130bn (£101bn) merger of Dow Chemicals and Du Pont.

More broadly, the regulator also took issue with Bayer's plan to create combined offerings of seeds and pesticides with the help of new digital farming tools, which include sensors, software and precision machines.

Bayer is a leading producer of insecticides and Monsanto is best known for developing genetically modified seeds to increase crop yields.

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And ChemChina had to sell a large chunk of its subsidiary Adama's pesticide, herbicides and insecticides business, its seed treatment products for cereals and sugar beet and a substantial part of its plant growth regulator business for cereals to win European Union approval to buy Syngenta.

"Seeds and pesticide products are essential for farmers and ultimately consumers".

On 31 July 2017, Bayer and Monsanto submitted commitments to address some of the Commission's preliminary concerns.

Bayer said in a statement that it "had expected further review of the proposed acquisition of Monsanto due to the size and scope of the transaction".

"Bayer believes that the proposed combination will be highly beneficial for farmers and consumers, and will continue to work closely and constructively with the European Commission in its investigation", the company said in a statement.

Nineteen Democratic U.S. senators told the Justice Department last month it should "conduct a thorough and impartial analysis" of the merger.

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