On Tuesday, the European Commission announced that an in-depth inquiry into the acquisition of the American seeds specialist OGM Monsanto by the German pharmaceutical and agro-chemicals group Bayer had been opened. The European Executive writes in a communiqué that it “fears that concentration will serve to reduce competition in spheres such as pesticides, seeds and agronomic areas.”
Bayer’s takeover of Monsanto’s for $66 billion dollars (around €56 billion) was announced in September 2016. The Commission stresses that “it would lead to the creation of the most significant integrated global business in the pesticide and seed sectors.” It adds, “Moreover, the operation would take place in activity sectors which are already globally concentrated.”
The European Commission has already allowed two mega-mergers in agrochemicals since the beginning of the year, each time subject to conditions. At the end of March, Brussels had allowed the merger of the American giants Dow and DuPont, so as to produce in a few days DowDuPont, a colossal business worth $130 billion on the Stock Exchange.
Ten days later, it validated the Chinese giant ChemChina takeover of the Swiss company Syngenta for $43 billion (€40 billion euros at the time, currently €36.5 billion), the largest acquisition ever by a Chinese group abroad. The new entities have made a commitment to the EU regarding reselling some of their activities, so as to guarantee competition on European market.
Bayer’s accounts in 2016 showed a net group profit of €4.5 billion, with a turnover of €46.8 billion. At the end of July, it announced that it was banking upon a current-year turnover of “more than €49 billion.” Monsanto’s trading profit carried forward from 2015/2016 is $1.34 billion (€850 million), with a turnover of $13.5 billion (€11.5 billion).