After the European Commission, the American Department of Justice has also said yes. Only a few details remain and the Bayer-Monsanto merger will become reality.
As far as the United States Department of Justice is concerned, it can go ahead: the chemical and pharmaceutical multinational Bayer can buy Monsanto for 66 billion dollars, creating the largest global giant in the seeds and agrochemicals market. All that is needed for it to become official is the green light from Mexico and Canada, which is considered little more than a formality. Much to the dismay of environmentalists and civil society, powerless spectators of an operation that is enormous both in its economic scale and in the consequences it will have for agriculture across the entire planet.
It was May 2016 when what had initially seemed like mere rumours was officially confirmed for the first time: Bayer's top executives had met with those of Monsanto to discuss an acquisition. First, 62 billion dollars were offered (122 dollars per share), then 64 billion (125 dollars per share), but for Monsanto it was still not enough. The American multinational, producer of GMOs and the controversial herbicide glyphosate, only agreed when the figure of 66 billion dollars — 128 dollars per share — was reached.
Over these two years, the potential obstacles fell one after another like skittles. One of the most eagerly awaited opinions was that of the European Commission, which gave its verdict on 21 March. The Bayer-Monsanto marriage does not violate competition rules — the EU authorities declared — since the German pharmaceutical multinational agreed to divest a range of activities linked to seeds, pesticides and digital agriculture, worth approximately 6 billion euros. To avoid holding a monopoly on glyphosate through the commercial product Roundup, Bayer agreed to transfer certain research lines to fellow German company Basf.
The timeline of the Bayer-Monsanto merger
- 20 May 2016: Perché Bayer vuole comprare Monsanto e cosa c'è di male
- 23 May 2016: Bayer svela l'offerta: 62 miliardi di dollari per comprare Monsanto
- 30 June 2016: Monsanto, trattative ancora aperte. Con Bayer e non solo
- 5 September 2016: Bayer vuole Monsanto a tutti i costi. Ma i dubbi restano
- 14 September 2016: Bayer-Monsanto, arriva l'accordo. E vale 66 miliardi di dollari
- 7 March 2018: Stop alle megafusioni tra multinazionali come Bayer e Monsanto che tolgono diritti ai cittadini
- 21 March 2018: Bayer-Monsanto, l'Europa dice sì: "La concorrenza non è a rischio"
The Washington Department of Justice followed the same line as the European Commission, but demanded some additional guarantees. In order to reach their goal, the Germans agreed to transfer further activities to Basf, with a total value of around 9 billion dollars. More precisely, certain seeds are being "sacrificed" (including soya and canola) along with the herbicide Liberty, which currently compete with Monsanto's products, as well as some patents and research and development projects. Had Bayer not accepted these conditions, the American authorities stated, "the merger would have resulted in higher prices, lower quality and reduced choice across a wide range of seeds and crop protection products." It had never happened before in history that the US authorities had required a divestiture of assets on such a scale.
With this, Bayer clears the last major hurdle still standing between it and its goal. The green lights from Canada and Mexico could come shortly, perhaps by 14 June. This is the date formally set for the closing of the deal: if it is missed, Monsanto will have the right to withdraw or to request a further improved offer. At this stage, however, that option appears unlikely. To speed things up, the German giant aims to complete the divestitures in favour of Basf within the next two months. "Receiving the Department of Justice's approval brings us closer to our goal of creating a leading agricultural company," Bayer's chief executive, Werner Baumann, declared. "Our intention is to help farmers around the world grow more nutritious food in a more sustainable way."
