Thursday, September 15th 2016
Bayer's plan to take over Monsanto is triggering some alarm bells within some of the nation's largest farm organizations, and lawmakers are taking note, too. The $66 billion deal (including debt) that was announced by Bayer and Monsanto Wednesday morning could potentially create the world's largest crop protection and seed company - if regulators approve. But first, the deal and its potential impact will undergo intense scrutiny by regulatory agencies around the globe. Monsanto CEO Hugh Grant said the companies will need to file in about 30 jurisdictions for the merger, including in the U.S., European Union, Canada and Brazil. The companies also plan to seek approval from the Committee on Foreign Investment in the U.S., which reviews foreign-driven purchases of U.S. assets for national security risks. Bayer and Monsanto officials acknowledged there may be some overlap in their respective portfolios and some divestitures may be required by regulators. But they declined to speculate in advance on which products may have to be sold off in an effort to complete the deal. In the meantime, U.S. farm organizations are encouraging regulators to take a close look “under the hood,” especially as other major industry players like Dow and DuPont and ChemChina and Syngenta are also planning to join forces. Bayer noted that the combined company will have an R&D budget of about $2.5 billion, investing almost $1 billion more than the nearest competitor, which would be a combination of Dow Ag and DuPont Ag. Senate Judiciary Committee Chairman Chuck Grassley has called a hearing of the panel for Sept. 20 to look at the consolidation trend in the seed and chemical industries. Johnson, Young and the CEOs of major crop chemical companies are on the witness list, among others. Montana Senator Jon Tester went further, calling on the Justice Department to reject the merger between Bayer and Monsanto because it will “reduce competition, suppress innovation and threaten the very fabric of rural life.”