The deal would create the world’s largest integrated pesticides and seeds company, the Commission said, adding this limited the number of competitors selling herbicides and seeds in Europe.
“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,” it said in a statement on Tuesday.
While the Commission could block the deal, it has approved others in the industry, such as Dow’s tie-up with DuPont and ChemChina’s [CNNCC.UL] takeover of Syngenta – although only after securing big concessions.
The Commission said divestments offered by Bayer so far did not go far enough and that it aimed to make a final decision on the deal by Jan. 8.
Chad Bray of The New York Times reported that the commission has received thousands of comments about the deal:
In a letter to the public, Ms. Vestager said the commission had received more than 50,000 emails and more than 5,000 letters and postcards, as well as Twitter posts, expressing concerns about the transaction.
Ms. Vestager said that many of the comments expressed concern about potential negative effects of Monsanto and Bayer products, including risks to human health, food safety and consumer protection. She said the companies would be bound by “strict rules” in place to address those issues.
“While these concerns are of great importance, they do not form the basis for a merger assessment,” she said in her letter.
The Bayer-Monsanto combination is the latest in a series of mergers in the rapidly consolidating seed and agrochemical sector.
Natalia Drozdiak and Jacob Bunge of The Wall Street Journal reported that farmers will have a big impact:
Groups pushing back against agriculture industry consolidation have called on regulators to block the Bayer-Monsanto deal. This month a group of 24 agriculture organizations warned that the deal would strengthen Bayer’s hand with farmers and with smaller seed companies.
The past year has been another lean one for farmers. Swelling grain supplies in the U.S., Europe and South America have made corn, soybeans and wheat cheap, forcing farmers to curb spending.
Soybean and wheat prices have declined further over the past 12 months, and the U.S. Department of Agriculture projects that U.S. net farm income will slide to $62.3 billion this year — the fourth consecutive annual decline, and half what domestic farmers earned in 2013.
Some farmers in recent years have been able to counter cut-rate grain prices by harvesting bumper crops. But dry weather across some stretches of the U.S. Farm Belt this summer will make that harder as combines roll in the autumn, analysts say.
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