The European Commission has initiated a Phase II investigation of the proposed combination of Bayer and Monsanto.
The Commission has preliminary concerns that the proposed acquisition could reduce competition in a number of different markets resulting in higher prices, lower quality, less choice, and less innovation. In particular, the initial market investigation identified preliminary concerns in pesticides, seeds, and traits.
Commissioner Margrethe Vestager, in charge of competition policy, said: “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.”
In a statement released, Bayer said the company expected further review of the proposed acquisition of Monsanto due to the size and scope of the transaction. Bayer believes that the proposed combination will be highly beneficial for farmers and consumers, and will continue to work closely and constructively with the European Commission in its investigation.
The companies notified the transaction to the European Commission on June 30, 2017, and submitted commitments on July 31, 2017. The Commission now has 90 working days, until 8 January 2018, to take a decision. The opening of an in-depth investigation does not prejudge the final result of the investigation.
Given the worldwide scope of Bayer and Monsanto’s activities, the Commission is cooperating closely with other competition authorities, notably with the Department of Justice in the U.S. and the antitrust authorities of Australia, Brazil, Canada, and South Africa.