EU starts investigation into Bayer-Monsanto deal

This is what Reuters reports. The deal would create the world’s largest integrated pesticides and seeds company, the Commission said, adding this limited the number of competitors selling herbicides and seeds in Europe.

Concerns about proposed acquisition

“The Commission has preliminary concerns that the proposed acquisition could reduce competition in a number of different markets resulting in higher prices, lower quality, less choice and less innovation,” it said in a statement last Tuesday. The Commission said divestments offered by Bayer so far did not go far enough and that it aimed to make a final decision on the deal by 8 Jan.

Merger would reduce competition

Among individual markets where competition was at risk, the Commission named Monsanto’s weed killer glyphosate, or Roundup, which competes with Bayer’s glufosinate; vegetable and canola seeds, as well as licensing of cotton seed technology to peers. A merger would also reduce competition in the market for the genetic traits behind herbicide tolerance, which are typically licensed out to third-party seed companies. In addition, the Commission said the deal might slow the race to develop new products, such as wheat seeds and herbicides against weeds that have grown resistant to existing products.