Monsanto has already rejected billion-dollar offers, but Bayer is determined. According to experts, however, the merger would violate competition principles.
The Bayer-Monsanto soap opera gained new episodes over the summer, yet remains very much unresolved. The German pharmaceutical company appears more than determined to acquire the American firm, the market leader in GMOs. Yet so far all its billion-dollar offers have been rejected out of hand. Meanwhile, the world of agriculture — and beyond — is watching this monster merger with growing concern. And some scholars are pointing the finger: the Bayer-Monsanto merger would, in their view, constitute a clear violation of competition principles.
It all began in May, when the top executives of the German multinational met with those of Monsanto. The offer was colossal (62 billion dollars, equivalent to 122 dollars per share), but still not enough to convince the Americans. Negotiations continued and in July a new offer arrived: 64 billion dollars, 125 dollars per share. Still no deal. In early August, the Bloomberg agency revealed that Monsanto had granted Bayer permission to conduct an in-depth review of its accounts (due diligence). But it didn't end there. There are rumours that Bayer is prepared to push the price up to 135 dollars per share. Or, alternatively, to pursue a hostile takeover bid: that is, to persuade certain shareholders to side with it, going against the wishes of Monsanto's board of directors. 14 September could be a pivotal moment: on that date — Reuters reports — the German multinational's supervisory board is due to meet and could decide on the next move.
If it were to go through, this enormous deal would be set to upend the balance of world agriculture. And the first thorough, well-documented analyses proving as much have already emerged. One example is a paper by the Konkurrenz Group, a consultancy formed by two former officials of the United States antitrust authority, cited by Linkiesta. The conclusions they reach, after extensive analysis, are unambiguous. On the basis of Section 7 of the Clayton Act — the main regulatory reference for competition issues in mergers — the Bayer-Monsanto marriage would be contrary to competition principles. This is because: