EU Opens In-depth Investigation Into Proposed Acquisition Of Monsanto By Bayer

(RTTNews) - The European Commission has opened an in-depth investigation to assess the proposed acquisition of Monsanto (MON) by Bayer (BAYZF.PK, BAYRY.PK, BYR.L) under the EU Merger Regulation. The Commission has concerns that the merger may reduce competition in areas such as pesticides, seeds and traits.

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.

The Commission said it will further investigate whether competitors' access to distributors and farmers could become more difficult if Bayer and Monsanto were to bundle or tie their sales of pesticide products and seeds, notably with the advent of digital agriculture. Digital agriculture consists in the collection of data and information about farms with the aim of providing tailored advice or aggregated data to farmers. Both Bayer and Monsanto are currently investing in this emerging technology.

The transaction was notified to the Commission on 30 June 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.

On 31 July 2017, Bayer and Monsanto submitted commitments 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. The Commission therefore did not test them with market participants.

In mid-September 2016, Bayer said it agreed to buy Monsanto for $128 per share in an all-cash transaction.