BRIEF—Commission clears Bayer's acquisition of Monsanto, subject to conditions

21 March 2018

The European Commission has approved under the EU Merger Regulation the $62 billion acquisition of UA agri-chemical and seed giant Monsanto by Germany’s Bayer.

However, the merger is conditional on the divestiture of an extensive remedy package, which addresses the parties' overlaps in seeds, pesticides and digital agriculture.

Commissioner Margrethe Vestager, in charge of competition policy, said: "We have approved Bayer's plans to take over Monsanto because the parties' remedies, worth well over 6 billion euros ($7.4 billion), meet our competition concerns in full. Our decision ensures that there will be effective competition and innovation in seeds, pesticides and digital agriculture markets also after this merger.”

The commitments submitted by Bayer address these competition concerns in full:

They remove all of the parties' existing overlaps in seed and pesticide markets, where concerns were raised, by divesting the relevant Bayer businesses and assets.
They cover Bayer's global R&D organization for seeds and traits as well as Bayer's research activities to develop a challenger product to Monsanto's glyphosate. They also cover certain Monsanto assets, which in future would have competed with a Bayer seed treatment against nematode worms.
Finally, Bayer has committed to grant a licence to its entire global digital agriculture product portfolio and pipeline products to ensure continued competition on this emerging market.

On this basis, the Commission concluded that the divestment package enables a suitable buyer to sustainably replace Bayer's competitive effect in these markets and continue to innovate, for the benefit of European farmers and consumers.

Bayer has proposed BASF, the world’s largest chemical company, as purchaser for the remedy package. The Commission's assessment is ongoing whether a) the divestiture to BASF meets all purchaser requirements, and b) whether it creates any problematic overlaps or raises other competition concerns