EU Launches In-Depth Investigation Into Bayer-Monsanto $66 Billion Merger
The European Commission, the European Union's executive arm, announced Tuesday it has opened an in-depth investigation into Bayer's proposed $66 billion takeover of Monsanto over "concerns that the merger may reduce competition in areas such as pesticides, seeds and traits."
The controversial merger, if successful, will form the world's largest integrated seed and pesticide company.
"It would combine two competitors with leading portfolios in non-selective herbicides, seeds and traits, and digital agriculture," the commission stated. "Both companies are active in developing new products in these areas."
The commission warned that the acquisition could reduce competition in a number of different markets resulting in "higher prices, lower quality, less choice and less innovation."
The commission's initial market investigation identified three preliminary concerns, as follows:
Monsanto's pesticide product glyphosate is the most sold non-selective herbicide in Europe. Bayer produces glufosinate ammonium, also a non-selective herbicide and one of the very few alternatives to glyphosate. According to the commission's preliminary investigation, Monsanto and Bayer are two of a limited number of competitors in this field capable of discovering new active ingredients and developing new formulations, including addressing the growing problem of weed resistance to existing products.
In addition, the commission will further assess both Monsanto's activities in biological pesticide products that would compete with Bayer's existing portfolio of chemical pesticide products, and the parties' overlapping activities in products that tackle varroa mites, a parasite affecting bee colonies in Europe.
Bayer and Monsanto are both active in the breeding of vegetable seeds. The commission's initial investigation shows that the parties have high combined market shares in a number of these vegetable seeds markets, and that some of their products compete directly with each other.
Bayer and Monsanto are also active in the breeding and licensing of seeds for several field crops. Monsanto has the highest market share in oilseed rape seeds in Europe. Bayer, with the highest market share in oilseed rape seeds at global level, is one of the few players with the means to compete intensively in this market. Furthermore, both parties are important licensors of cotton seeds to their competitors in Europe, and both are investing in research and innovation programs for wheat.
A trait is a characteristic of a plant, such as height, herbicide tolerance and insect or disease resistance, and can be developed in laboratories and introduced in certain plant varieties.
The commission's preliminary investigation indicates that Monsanto has a dominant position in several traits markets worldwide. Bayer is one of the few competitors to Monsanto in certain traits markets, and has notably developed alternative herbicide tolerance traits to Monsanto's. The commission will investigate in particular whether the transaction could lead to a reduction of competition in these markets, taking into account the existing links between the few worldwide competitors through cross-licensing and through research and development cooperations.
"Moreover," the commission noted, "the transaction would take place in industries that are already globally concentrated, as illustrated by the recent mergers of Dow and Dupont and Syngenta and ChemChina, in which the commission intervened to protect competition for the benefit of farmers and consumers."
Bayer and Monsanto submitted commitments in late July to address some of the commission's preliminary concerns. However, the commission "considered these commitments insufficient to clearly dismiss its serious doubts as to the transaction's compatibility with the EU Merger Regulation."
Margrethe Vestager, who serves as European Commissioner for Competition, said that "seeds and pesticide products are essential for farmers and ultimately consumers."
"We need to ensure effective competition so that farmers can have access to innovative products, better quality and also purchase products at competitive prices. And at the same time maintain an environment where companies can innovate and invest in improved products," Vestager added.
The German pharmaceuticals company told Reuters it is still aiming to have the transaction approved by the end of the year.
"Bayer looks forward to continuing to work constructively with the commission with a view to obtaining the commission's approval," the company said.
The commission could block the Monsanto-Bayer deal but it has approved both Dow and DuPont's deal as well as ChemChina's takeover of Syngenta after major concessions, Reuters reported. The commission has until January to make a decision.
Bayer and Monsanto bosses tout the mega-deal as an altruistic plan to improve "the lives of growers and people around the world."
Hannah Lownsbrough, the executive director of the consumer group SumOfUs, wrote in the Guardian: "If approved, the merger would be an extremely risky consolidation of corporate power, not to mention a serious threat to food supplies and farmers around the world. It is essential that regulators properly investigate it and take decisive action before it's too late."
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By Naomi Larsson
For centuries, the delicate silver dove has been a symbol of love and fidelity.
Biodiversity and Habitat Loss<p>Their near extinction is a symbol of the <a href="https://www.dw.com/en/global-biodiversity-outlook-targets-extinction-summit-new-york-pledge/a-54932895" target="_blank">biodiversity crisis</a> in the UK, largely driven by habitat destruction. Britain is now one of the countries with the most <a href="https://www.wwf.org.uk/future-of-UK-nature#:~:text=The%20UK%20is%20one%20of,than%20half%20are%20in%20decline" target="_blank">depleted nature</a> in the world according to the World Wildlife Fund. Half its plant and animal species are in decline and more than <a href="https://www.rspb.org.uk/about-the-rspb/about-us/media-centre/press-releases/let-nature-sing-wales/#:~:text=a%20natural%20tragedy.-,Over%2040%20million%20birds%20have%20vanished%20from%20UK%20skies%20in,unaware%20of%20the%20impending%20danger" target="_blank">40 million birds</a> have vanished in just half a century.</p><p>"[Turtle doves] are the canary in the [coal] mine because there are all these other species before it and after it," said Tree. "It's an umbrella for all the other species that are heading that way."</p><p>Turtle doves migrate south through Europe to sub-Saharan Africa between July and September, ending up in dry woodland and farmland areas of countries like Mali and Senegal for winter. </p><p>Droughts in West Africa and the Sahel region are believed to have contributed to the fall in turtle dove species recorded in northern Europe, with low rainfall reducing supplies of the seeds and insects the birds rely on for energy for the long journey home.</p>
Conservation and Farming<p><a href="https://www.operationturtledove.org/" target="_blank" rel="noopener noreferrer">Operation Turtle Dove,</a> a partnership project of charities including the Essex Wildlife trust, works with landowners and farmers to actively build turtle dove habitat.</p><p>Outten works with <a href="https://www.ebws.org.uk/birdsites/blue-house-farm-ewt-north-fambridge" target="_blank">Blue House Farm</a>, a 660-acre nature reserve in the UK county of Essex, where they have replicated weedy fallow plots. </p><p>"We work on it every year to make sure it's in the condition it needs to be with plants such as clovers and black medic," Outten said. "These plants are native to the landscape and produce the seed the birds feed on." </p><p>The birds eat a wide range of seeds from various plants that would have been abundant 50 or 100 years ago, added Guy Anderson, program manager for species recovery with The Royal Society for the Protection of Birds (RSPB). </p><p>"But it's simply true that with the gradual process of <a href="https://www.dw.com/en/farming-without-pesticides-how-can-we-make-agriculture-greener/a-52216796" target="_blank" rel="noopener noreferrer">intensifying our agricultural production</a>, the availability of those seeds has dropped and dropped," said Anderson.</p><p>Part of the project includes supplementary feeding — providing sources of food in the form of seed or grain. Under the Countryside Stewardship Scheme in England, farmers can receive financial support to create a turtle dove habitat. </p><p>Though they haven't recorded an increase in doves across the sites in the four years of working on the project, Outten said they are seeing improvements in how landowners and farmers manage habitat for the birds. </p>
A Turtle Dove Haven<p>The 3,500-acre Knepp Estate in West Sussex is another project taking a different approach and one of the few places where turtle dove numbers are increasing.</p><p>Isabella Tree and her husband Charlie Burrell converted their intensively farmed land into a rewilding project almost 20 years ago. They have let the land return to nature.</p><p>Just one year after they'd finished <a href="https://www.dw.com/en/uks-most-talented-architects-are-not-human/a-35952128" target="_blank">rewilding</a> the southern part of their property, they heard turtle doves for the first time. It's now a breeding hotspot for the birds with an estimated 19 pairs. Knepp is also home to <a href="https://www.rewildingbritain.org.uk/rewilding/rewilding-projects/knepp-estate" target="_blank" rel="noopener noreferrer">2% of the UK's population</a> of nightingales. </p><p>Tree is critical of supplementary feeding schemes that, in her view, are short term. She questions the chances of turtle doves getting to feed on scattered seeds before other mammals eat them first.</p>
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Green groups applauded Sen. Jeff Merkley on Wednesday for introducing a pioneering pair of bills that aim to "protect the long-term health and well-being of the American people and their economy from the catastrophic effects of climate chaos" by preventing banks and international financial institutions from financing fossil fuels.