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Monsanto-Bayer Merger Yet to Close After Self-Imposed Deadline
However, as Bloomberg BNA reports, the companies have not been able to meet its self-imposed, one-year deadline due to political and regulatory scrutiny. The deal is unlikely to close soon, as it has not received antitrust clearance in roughly 30 countries, including the European Union, the U.S., Brazil and India.
Experts have warned that the combination—which would claim 30 percent of the global crop-inputs business if successfully executed—could significantly and negatively impact farmers and food production. Monsanto controls 80 percent of the U.S. corn market and 93 percent of the U.S. soy market.
"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."
"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."
But Bloomberg analyst Brooke Sutherland told Bloomberg BNA that the motivation to close the deal remains strong, and Monsanto remains highly attractive to Bayer.
The German pharmaceuticals company told Reuters last month it aims 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.
According to Bloomberg BNA, the deal is still alive even if it does not close Sept. 14. The merger agreement allows the contractual deadline to extend to June 14, 2018, if necessary, to complete regulatory approvals.
Bayer will pay Monsanto a break-up fee of $2 billion if the deal is not completed.
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