mon bayer merger

European Commission Launches Major Investigation Into Controversial $66 Billion Monsanto-Bayer Merger

By On August 28, 2017

The Monsanto-Bayer merger has been in the works for over a year now, and despite their intentions the pending world’s largest combined seed and pesticide company still has not come to fruition.

The deal could be a major boon for both companies, but critics worry that farmers, consumers, and the environment will all suffer under what could be a monopoly in the business.

This past Wednesday, it was announced that a major European organization had shared similar concerns over the financial and competition aspects of the merger, stating that it would be launching an in-depth investigation soon.

EU’s Executive Arm Announces Plans to Investigate

Monsanto and Bayer are expected to be the subject of a major investigation by the European Commision, which said that it has “concerns that the merger may reduce competition in areas such as pesticides, seeds and traits.”

According to this article from the website, the merger could reduce competition in a number of different markets, which would potentially result in “higher prices, lower quality, less choice and less innovation.”

“It would combine two competitors with leading portfolios in non-selective herbicides, seeds and traits, and digital agriculture,” the commission also wrote according to the article. “Both companies are active in developing new products in these areas.”

Three main areas were identified for concern, the article added, including pesticides, seeds, and plants with “traits,” another word for characteristics given to genetically engineered seed crops created in the laboratory by the two companies (also known as GMOs or genetically modified organisms).

The report, created with an eye on the economics of the situation (rather than longstanding health and environmental concerns), raises important questions concerning whether the partnership should be allowed or not from an economic standpoint.

In terms of pesticides, it was noted that Monsanto’s glyphosate is the most sold non-selective herbicide in Europe, but Bayer produces one of the few alternatives, giving the potential new corporation a massive advantage in the marketplace.

Both companies are also highly successful in the seed market meaning that competiton may be diminished greatly through a merger.

A lack of competition in the traits market could also result according to the report as both sides are active in this market as well.

“Moreover,” the commission noted, “the transaction would take place in industries that are already globally concentrated, as illustrated by the recent mergers of Dow and Dupont and Syngenta and ChemChina, in which the commission intervened to protect competition for the benefit of farmers and consumers.”

For more info on the proposed mega-merger and why there may be opposition to the Monsanto-Bayer alleged plan to improve “the lives of growers and people around the world,” clicking on this link.

Thumbnail photo via Bayer TV International/Youtube