May 31, 2018

US gives conditional nod to Bayer's proposed acquisition of Monsanto

Some two months after getting conditional approval from the European Commission, Bayer obtained conditional nod from the US Department of Justice's (DOJ) antitrust division on Tuesday, May 29, for its proposed acquisition of Monsanto .

Shareowners of Monsanto approved the merger with the German pesticide firm way back on Dec. 13, 2016. Under the terms of the merger agreement, Monsanto shareowners would receive $128 per share in cash at the closing of the merger.

"Receipt of the DOJ's approval brings us close to our goal of creating a leading company in agriculture," said Bayer CEO Werner Baumann. "We want to help farmers across the world grow more nutritious food in a more sustainable way."

Bayer said it has now obtained almost all clearances, which are conditions for closing the transaction. "The company expects to receive any outstanding approvals required for completing the transaction very shortly", it added.

Bayer will become the sole shareholder of the US seeds company following the receipt of outstanding approvals. According to the DOJ's conditional approval, the integration of Monsanto into Bayer can take place as soon as the divestments to BASF have been accomplished. This is expected in around two months, Bayer said.   

Bayer has signed an agreement to sell selected Crop Science businesses to BASF for EUR5.9 billion (US$6.9 billion). The sale is subject to successful closing of Bayer's acquisition of Monsanto.

The Brazilian, Chinese and South African competition authorities have also cleared the transaction between the two companies with conditions.

The merger is seen to create the world's largest player active in both seeds and pesticides.

The Consumer Federation of America, an association of more than 250 nonprofit consumer and cooperative groups, has expressed opposition to the merger, saying it would "dramatically increase the incentive and ability to raise prices and manipulate research and development to the detriment of farmers and consumers".