Bayer Wins U.S. Approval for Monsanto Following Two-Year Quest

Bayer Wins U.S. Approval for Monsanto Following Two-Year Quest

Bayer AG gained U.S. antitrust approval for its $66 billion takeover of Monsanto Co., clearing the final main regulatory hurdle to forming the world’s largest seed and agricultural-chemicals supplier after a virtually two-year world evaluation.

The firms reached a settlement with the Justice Department that resolves the federal government’s issues that the merger as initially structured would hurt customers and farmers, the U.S. stated in an announcement Tuesday. The settlement requires the sale of belongings to BASF SE that Bayer has beforehand introduced. The divestiture bundle is value about $9 billion, the most important in a U.S. merger enforcement case, the federal government stated.

“America’s farm system is of critical importance to our economy, to our food system, and to our way of life,” Makan Delrahim, the pinnacle of the division’s antitrust division, stated on a name with reporters. “American farmers and consumers rely on head-to-head competition between Bayer and Monsanto.”

Bayer wins U.S. antitrust approval for its $66 billion takeover of Monsanto. Bloomberg’s Simon Casey experiences.

(Source: Bloomberg)

For Bayer, buying Monsanto is the final step in a company transformation because the 154-year-old firm shed its plastics enterprise and remade itself as a life-science firm with equally-sized well being and agriculture models. Once the deal is thru, three world behemoths will dominate the world’s agriculture business, a prospect that has left farmers nervous about the potential for increased costs and fewer selection.

National Farmers Union, the second-biggest U.S. farmer group, criticized the Justice Department Tuesday for “continued rubber-stamping” of mergers in meals and agriculture.

“This extreme consolidation drives up costs for farmers and it limits their choice of products in the marketplace,” the group stated in an announcement. “We will now focus our efforts on ensuring the promises made by Bayer and Monsanto throughout this approval process are kept.”

California officers stated on Tuesday that they might “carefully” study the Justice Department settlement. The state’s lawyer basic, Xavier Becerra, stated in an announcement that “this deal could further suffocate competition in the agricultural sector.” State attorneys basic have the authority to problem mergers in court docket.

Significant Divestitures

The settlement got here collectively after Justice Department antitrust officers pressed for important divestitures to treatment the competitors issues from combining the 2 firms. The firms have obtained antitrust approval from most jurisdictions world wide. Bayer has stated it’s assured the deal will shut by the June 14 deadline.

Bayer expects to obtain the approvals it wants from Canada and Mexico within the coming days, in response to an announcement from the Leverkusen, Germany-based firm. The European Union permitted BASF as the client of the belongings Tuesday.

Bayer can then shut the deal as soon as it has the remaining approvals though the combination of the 2 firms gained’t occur till the BASF divestitures are completed, which is able to most likely be in about two months. Monsanto, based mostly in St. Louis, stated it was happy with the U.S. approval.

Merger Wave

The Monsanto takeover extends a sequence of tie-ups within the agricultural business. Last yr, U.S. and EU regulators permitted two different main offers within the sector, Dow Chemical Co.’s merger with DuPont Co. and China National Chemical Corp.’s takeover of Syngenta AG. With about $48 billion in gross sales from their mixed companies, Bayer and Monsanto will surpass these of each DowDuPont Inc. and China National.

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