German chemical company Bayer’s mooted acquisition of US seed and biotechnology firm Monsanto has come under fire from anti-trust legal experts.
In a new report, ‘An Antitrust Review of a Bayer-Monsanto Merger’,Washington DC-based Konkurrenz Group warned that the merger, which would create the world’s biggest seed and pesticide business, would violate anti-trust laws and reduce competition.
The deal would eliminate direct competition between two of the biggest players in the farm supply and seed sector, a report from Konkurrenz stated, affecting seed development, herbicide markets and research and development. The result, it warned, would be less choice and higher food prices for consumers.
One key issue surrounds Monsanto’s RoundUp, whose only viable competitor at present is Bayer’s Liberty Link. “Not only will a merger end the head-to-head competition between Bayer and Monsanto,” the report stated, “it significantly reduces the incentives to further develop herbicides and herbicide-tolerant traits.”
Concerns also run high regarding the merger’s impact on the seed market. “Farmers’ choices of seeds they can access will be severely limited after a deal, as more traits, seeds, and herbicides could be foreclosed and squeezed out of the market due to licensing restrictions,” the report argued. “Ultimately, this will reduce consumer choice as upstream market impacts take hold.”
Bayer’s initial US$62bn bid was publicly rebuffed by Monsanto last month, but Bayer chief executive Werner Baumann insisted that negotiations would continue in private.
