|Werner Baumann, CEO of Bayer AG, and Hugh Grant, CEO of|
Monsanto. Credit: Bayer AG
Monsanto Shareholders Approve Bayer Merger to Form World's Largest Seed and Chemical Company
by Lorraine Chow, EcoWatch, 14 December 2016
Monsanto shareholders voted to approve the company's $66 billion takeover by German pesticide and pharmaceutical corporation Bayer AG on Tuesday.
The acquisition faces intense regulatory scrutiny in the U.S., the European Union and other markets, as combining the two multinational juggernauts would form the world's largest seed and chemical company.
As Reuters reported, the combined companies plan to increase research and development spending and develop a global seeds and biotechnology hub in St. Louis to help spur regulatory approval.
"I think those augur well for the deal," Monsanto CEO Hugh Grant told the news service.
Grant told the St. Louis Dispatch that regulatory filings have now been made in the U.S. The deal also needs to be upheld in the European Union, Brazil, India and China. The Monsanto boss is hopeful that the proposed merger would pass in all jurisdictions, since "the overlap between the two [companies] is really quite small."
But last month, several U.S. state attorneys generals reportedly joined federal antitrust investigations of the pending multibillion dollar deal. One concern is Bayer and Monsanto's overlapping cotton seeds. Bayer licenses genetic traits that make seeds resistant to the herbicide Liberty, while Monsanto licenses traits that make seeds resistant to its herbicide Roundup.
Monsanto and Bayer control the two top cotton seed brands in the U.S., respectively—or about 70 percent of all cotton acreage in the country.
"One of the worst things you could do is to link Liberty and Roundup in the same company," Peter Carstensen, a law professor at the University of Wisconsin and leading agricultural antitrust expert, explained to the St. Louis Dispatch. "There's no incentive for somebody to develop a third alternative."
Critics of the takeover have many concerns including increased prices for farmers and consumers due to reduced competition, the monopolization of the global food supply and the proliferation of pesticides.