Opponents of industry mergers and modern farming techniques thought they had the perfect partners in the Obama Administration to more strictly enforce anti-trust laws and stop industry consolidation in agriculture. That didn’t happen.
Now they are back with a new report, opposing the Bayer-Monsanto merger, and hoping the new Trump team will listen.
The deal – expected to close on Jan. 22, 2018 – would bring together two giants in the agriculture space and is valued at about $66 billion. The companies say it will lead to greater innovation, better products, and an increased sense of social responsibility on the part of the new venture. Opponents, however, don’t see it that way.
“To be clear, Monsanto-Bayer merger is really a merger made in hell for everything we care about,” Erich Pica, president of the environmental group Friends of the Earth, said Tuesday at a briefing in Washington. It’s a phrase the groups’ European counterpart has been messaging for the last year or so. The organization advocates against genetically-modified crops and what they describe as “factory farms,” among other issues.
Another speaker, Mark Cooper, a senior fellow at the Consumer Federation of America, said the deal should be justifiably halted by DOJ’s antitrust measures.
“Anyone familiar with the Department of Justice (DOJ) merger guidelines will understand that this merger violates those guidelines by a mile,” Cooper said. “In 35 years, I have never seen a merger that is farther away from being acceptable than this one. It may be the worst merger in American history.”
Cooper (pictured above) also detailed his logic in a report detailing how the deal would violate DOJ’s Horizontal Merger Guidelines, which DOJ’s website says describe “the analytical framework and specific standards normally used by the agency in analyzing mergers.” The report notes the increased leverage the deal would give the new company across many different sectors.
“This merger can’t deliver benefits to rural America. It simply cannot. It can only impose more harm,” Cooper said, adding that “approving this kind of merger puts you on the opposite side” of family farmers in the U.S.
However, John Dillard, an associate attorney at OFW Law in Washington, told Agri-Pulse he would be "very surprised" if DOJ were to put a stop to the deal.
"I think it would be very contentious if DOJ just tried to absolutely bar any type of merger between Bayer and Monsanto," he said. "I don't think it would be in line with what has happened with the other seed chemical input suppliers."
Dillard said he "would fully expect" DOJ to "require some other type of concession," but he "can't see them" taking the kind of action Cooper is suggesting.
Bayer has already sold almost $7 billion in assets to BASF, including the company's LibertyLink trait and trademarks in the canola, corn, cotton and soybean spaces.
In a statement, a Bayer spokesperson told Agri-Pulse the market in which the potential new company will do business “is and will continue to remain highly competitive … We will only succeed with pricing and selling our products if our value proposition to our customers is better than that of our competitors and if we continue to innovate.”
A spokesperson for Monsanto also pointed out that the companies believe they are "two very different but highly complimentary companies." She said the deal would help the new entity in delivering "new choices even faster" and will expand "all of the offerings that will be available to growers through broad licensing in the years to come."
On the issue of regulatory approvals from the U.S. and other governments, the spokesperson said Bayer would “welcome the review of regulatory and have proactively entered into an agreement to divest certain businesses to satisfy potential regulatory concerns.
“We remain confident in our ability to obtain all necessary regulatory approvals and look forward to continuing go work diligently with regulators to support that process.”
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