Monsanto’s Bid to Acquire Syngenta Raises Antitrust Concerns

 

What will the seed and biotechnology industries look like if agribusiness giant Monsanto acquires the world’s largest supplier of pesticides? The Diane Rehm Show explores the possible Monsanto-Syngenta merger in hosting three guests: Alan Bjerga, an agricultural policy and commodities reporter for Bloomberg News; Scott Partridge, Monsanto’s vice president of strategy; and Diana Moss, the president of the American Antitrust Institute.

With Monsanto’s 45-billion offer on the table comes concerns about limited competition and consumer choice in the marketplace. Not only are seed prices likely to continue their upward trend- seed costs for farmers have as much as tripled over the past decade- biodiversity has been drastically decreased by seed industry consolidation and vertical integration over time.

Monsanto is already the largest player in the global chemical, traits, and seed marketplace, claiming 25-40% of the market share depending on region. Syngenta’s European dominance offers a different distribution network for the company. Its portfolio stands to see significant growth. Rehm summarized that Monsanto’s new market share as: 42% of the North American market, 28% of the Latin American market, and 25% of the European and Middle Eastern market.

Antitrust agencies, like the Department of Justice (DOJ), “are going to take a very skeptical, very very close look at this, as they have in past deals,” said Moss.

“When the DOJ takes a very close look at this deal, they’re going to see a very large powerfully vertically integrated platform of chemicals, traits, and seeds, that will all be orchestrated to work together, that will be presented to the farmer in a very expensive package, where other rivals potentially cannot inter-operate with Monsanto’s chemicals, traits, and seeds, and that no other company in this domain, in this market space, can compete head-to-head on the level that Monsanto is going to present itself after this merger,” said Moss.

Partridge said that Monsanto plans to divest any overlapping assets upon merger, making them available to another competitor.

Who will buy those assets in order to restore competition lost to the merger?, asks Moss.

“The merger enhances Monsanto’s market power tremendously,” she said, stating that if Monsanto and Syngenta combine portfolios, the merged company holds the potential to foreclose rivals and further hinder competition.

Listen to The Diane Rehm Show’s “Concerns Over Monsanto’s Bid To Acquire The World’s Largest Supplier Of Pesticides.”

 

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