According to the European Commission, the mega-merger between Bayer and Monsanto is not a problem for competition. But the last word has not yet been said.
Nearly two years after the start of the monster acquisition, the official response of the European Commission has arrived. Bayer can buy Monsanto. The deal, according to EU authorities, is in line with European competition regulations. This is primarily because Bayer, in order to eliminate areas of overlap, has agreed to divest a series of businesses related to seeds, pesticides and digital agriculture, with a total value of around 6 billion euros.
The measures adopted by the pharmaceutical multinational, reads the official statement by Commissioner Margrethe Vestager, "fully address our competition concerns". Competition is fundamental, she continued, "to ensure that farmers have a wide choice of seeds and pesticides at reasonable prices", but also "to drive companies to invest in digital agriculture and continue to develop new products that can meet the high standards set by European regulations, for the benefit of people and the environment". To reach this conclusion, the Commission carried out an in-depth analysis, examining 2.7 million internal documents and the characteristics of around 2,000 products.
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In concrete terms, one of the most complicated knots to untangle was that of glyphosate, the controversial active ingredient in the herbicide Roundup, the sale of which was authorised in Europe for a further five years. To avoid establishing a monopoly, Bayer committed to transferring certain research lines to Basf, effectively placing it in a position to develop an alternative product. It was Bayer itself that identified Basf, also German, as the recipient of the remedial proposals submitted for the merger.
However, the Commission makes clear, the last word has not yet been said. Bayer and Basf will need to implement the promised measures and submit everything once again for antitrust scrutiny. In other words, the authorities approve this plan on paper, but want to verify that it also works in practice. Only at that point will the definitive green light be given. The green light from the United States Department of Justice has also yet to be obtained.
