ACTION ALERT: War on the Bees -- Stop the Monsanto-Bayer Mega-merger
December 3, 2017
SumOfUs & Robert-Jan Bartunek and Ludwig Burger / Reuters & Brad Plumer / Vox.com
Bayer and Monsanto have filed a merger request with antitrust authorities in Europe and the US. If they succeed, we'll face a nightmare scenario: more bee-killing neonics in our fields, more toxic glyphosate on our plates, more corporate control over our food supply. Regulators can still stop this merger, but they’re getting hammered by corporate lobbyists pressuring them to back off. That's why we need to move fast -- antitrust regulators have a limited amount of time to take action, and the clock is ticking.
ACTION: Save the Bees;
Stop the Monsanto-Bayer Mega-merger
EU Commissioner for Competition Margrethe Vestager and
Head of the antitrust Authority in the U.S. Department of Justice
(December 2, 2017) -- Bayer and Monsanto have filed their merger with antitrust authorities in Europe and the US. If they succeed, we are facing a nightmare scenario: more bee-killing neonics in our fields, more toxic glyphosate on our plates, and more corporate control over our food supply.
Regulators can still stop this merger, but they’re already getting hammered by corporate lobbyists pressuring them to back off.
That's why we need to move fast -- antitrust regulators have a limited amount of time to take action, and the clock is already ticking.
With your help and the donations of thousands of generous SumOfUs members around the world, we have already made great strides to stop this merger from happening.
We’ve put up ads in a key European newspaper and SumOfUs members sent thousands of postcards to the EU Commissioner Vestager. As a result the EU ordered an in-depth probe, giving us more time to stop the merger for good.
We also hired some of the world’s top legal minds to prove that the merger is a disaster, in violation of antitrust law and simply can’t go ahead.
We’ve published the results as a legal white paper and you have tweeted and emailed the European and US antitrust authorities in a massive public outcry against this deal. We made sure that everyone from the Financial Times to Bloomberg reported on our white paper.
We’ve turned up at any public event Bayer and Monsanto are planning to protest this merger. Hollywood star Mark Ruffalo even shared the campaign with his followers.
But to convince the regulators to step in, it will take a massive grassroots outcry right now.
A Bayer-Monsanto merger is not inevitable. We have seen again and again what happens when powerful corporations get their way. The merger wave has led to banks deemed too big to fail and only 6 big big agrochemical corporations controlling almost everything we eat. Farmers are being squeezed too, with higher prices and fewer choices.
It sounds grim -- and it is -- but we know we can stop this merger. We did the impossible in 2014 when SumOfUs members helped stop Comcast from acquiring Time Warner in an unprecedented takeover. It was the Department of Justice that laid the finishing blow -- but it was tens of thousands of SumOfUs members and our allies us who made it happen.
ACTION: Please call on the Department of Justice and the EU Commissioner for Competition to block this merger! Sign the petition!
Anne, Angus, Toni, and the rest of the SumOfUs team
EU Starts In-depth Probe of Bayer, Monsanto Deal
Robert-Jan Bartunek, Ludwig Burger / Reuters
BRUSSELS/FRANKFURT (August 22, 2017) -- The European Commission has started an in-depth investigation of Bayer’s planned $66 billion takeover of U.S. seeds group Monsanto, saying it was worried about competition in various pesticide and seeds markets.
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.
“Bayer looks forward to continuing to work constructively with the Commission with a view to obtaining the Commission’s approval,” the German company said in a statement, adding it still aimed to have the transaction approved by the year end.
Among individual markets where competition was at risk, the Commission named Monsanto’s weed killer glyphosate, or Roundup, which competes with Bayer’s glufosinate; vegetable and canola seeds, as well as licensing of cotton seed technology to peers.
A merger would also reduce competition in the market for the genetic traits behind herbicide tolerance, which are typically licensed out to third-party seed companies.
In addition, the Commission said the deal might slow the race to develop new products, such as wheat seeds and herbicides against weeds that have grown resistant to existing products.
More broadly, the regulator also took issue with Bayer’s plan to create combined offerings of seeds and pesticides with the help of new digital farming tools, which include sensors, software and precision machines.
“The Commission 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,” it said.
Bayer has already pledged to sell its glufosinate crop chemical, branded as Liberty, and canola and cotton seeds that resist the chemical’s plant-killing effect to get approval for the deal from South African regulators.
In the takeover contract with Monsanto, Bayer pledged to divest businesses with up to $1.6 billion in annual sales, if required by antitrust regulators, though the company has said it expects to stay below that figure.
Rivals BASF and ChemChina’s Syngenta are expected to be among suitors for assets likely to be sold by Bayer, according to people familiar with the industry. The business are roughly estimated to be worth a combined $2.5 billion.
But Bayer will have to weigh up whether any further concessions required by the Commission still make the deal worthwhile.
In order to secure approval to acquire Dupont, Dow had to agree to sell key research and development activities and other major assets.
And ChemChina had to sell a large chunk of its subsidiary Adama’s pesticide, herbicides and insecticides business, its seed treatment products for cereals and sugar beet and a substantial part of its plant growth regulator business for cereals to win EU approval to buy Syngenta.
The Commission said it was working with regulators in other markets, such as the United States, Australia and Brazil to vet the Bayer-Monsanto deal.
The proposed tie-up has also hit a raw nerve with some activists who fear such a combination would hurt farmers, consumers and the environment.
Why Bayer's Massive Deal to
Buy Monsanto Is So Worrisome
Brad Plumer / Vox.com
(September 15, 2016) -- Monsanto. It’s hard to even say the name without triggering a fierce reaction. The company has long been the public face of GMOs, thanks in part to the sheer dominance of its corn, soy, cotton, and other crops engineered to be resistant to the herbicide Roundup.
And pretty soon, Monsanto may no longer exist. At least not in its current form.
On Wednesday, the German chemical conglomerate Bayer offered to buy up Monsanto for $56 billion, in what could prove to be the largest corporate merger of the year. Monsanto has accepted the bid. And if the deal is approved by regulators -- which is still an open question -- the new company would become the largest agribusiness on the planet, selling 29 percent of the world’s seeds and 24 percent of its pesticides.
That would put the new firm in a commanding position vis-à-vis our food supply. Which is why European Union regulators and the US Department of Justice are likely toscrutinize this deal more closely than usual, to make sure it doesn’t create an all-consuming monopoly that can crank up prices on farmers and shoppers. The deal comes amid a blurry rush of agribusiness consolidation in recent months, with ChemChina-Syngenta and DuPont-Dow Chemical forming their own multibillion-dollar Voltrons.
Some onlookers are fretting that the reduced competition could shrivel up innovation, leading to slower improvements in crop yields. Others worry that these new agricultural giants may have outsize political power.
"They’ll have more ability to lobby governments," says Phil Howard of Michigan State University, who studies consolidation in the food industry. "They’ll have a lot more power to shape policies that benefit themselves at the expense of consumers and farmers."
It’s a big story, and not just because Monsanto is such a famous (or infamous, if you prefer) brand. The consolidation of the world’s seed, chemical, and fertilizer industries over the past two decades has been astonishing, with potentially large ripple effects for farms and food systems all over the globe.
The Agricultural Industry
Keeps Getting More and More Consolidated . . .
Back in 1994, the world’s four biggest seed companies controlled just 21 percent of the market. But in the years since, as crop biotechology advanced, companies like Monsanto, Syngenta, Dow, Bayer, and Dupont went on a feeding frenzy, buying up smaller companies and their patents. Today, the top four seed companies and top four agrochemical firms command more than half their respective markets.
And the pressures to merge have only become even more intense. Due to an economic slowdown in China and a glut of food production over the past few years, the global agricultural economy has been slumping.
Commodity prices have fallen sharply, and farmers have less to spend on supplies (as well as on pricier biotech seeds). And the major seed, chemical, and fertilizer companies haven’t been able to churn out enough innovative new products to counteract this trend.
So their only choice at this point is to consolidate further, hoping to convince shareholders that they can slash costs and keep profits high.
Monsanto, the world’s largest seed producer, has found itself in a surprisingly precarious position. For years, the company reaped huge profits from selling its popular weedkiller, glyphosate (known as "Roundup") in tandem with crops genetically engineered to withstand glyphosate (known as "Roundup Ready" crops).
But thanks in part to improper use, more and more weeds in the United States are developing resistance to glyphosate -- and Monsanto is racing to find a replacement. The company is currently investing $1 billion to develop crops resistant to dicamba, another herbicide, but a merger would help it maintain market share in the meantime.
Last year, Monsanto put in a failed bid to buy up Syngenta, the world’s largest agrochemical producer. After the deal fell through, Syngenta CEO Mike Mack said the bid showed that Monsanto’s "core markets have been saturated" and that the company lacked "fundamentally new innovation" to drive growth. You might say the same about the Bayer-Monsanto merger.
Monsanto’s not alone here. Last year, Dow Chemical and Dupont agreed to combinetheir crop science divisions, and are waiting on US and EU regulators for approval. This year, the China National Chemical Corporation got the okay from US regulators to buy the Swiss seed company Syngenta in a $43 billion deal.
Last week, in Canada, Potash Corporation of Saskatchewan and Agrium joined forces to create a fertilizer giant amid slumping fertilizer prices.
If all these mergers go through, Tom Philpott of Mother Jones points out, the three biggest companies that will emerge (Bayer-Monsanto, ChemChina-Syngenta, and DowDupont) will sell 59 percent of the world’s patented seeds and 64 percent of all pesticides. The behemoths are getting behemoth-ier.
Why All These Mergers Are Worrisome
There are a couple of reasons to be concerned about an agricultural landscape dominated by just a handful of giant companies. If firms can corner key markets in seeds and chemicals, they might be able to raise prices of their products on farmers, which in turn could make food more expensive. For this reason, groups like the National Farmers Union have been opposing many of these deals.
The other fear is that if these behemoths face less competition, they may face less pressure to pursue the sorts of innovations needed to improve crop yields and help feed a rapidly growing world. Some worry that these newly merged companies would end up focusing more on their most profitable crops rather than branch into smaller and underserved markets such as Africa.
"As these industries have consolidated, they’ve spent less on research, and what research they do has been steered toward big blockbuster profits with commodity crops such as corn or soy," Howard says. That means they’ve been spending less on smaller crops and even focusing less on smaller markets like the Southeast US.
Last year, when Monsanto was trying to buy up Syngenta, the company argued these fears were unfounded. Among other things, the company contended that innovation might actually be quicker, not slower, if research labs were consolidated.
The big question now is whether regulators will buy these arguments. The US Justice Department’s antitrust division will have to decide whether to approve the Bayer-Monsanto deal, block it, or add conditions before it can go through.
For their part, Bayer and Monsanto are arguing that the two companies have little overlap: Monsanto focuses on seeds and biology, Bayer on chemicals. But, for instance, Jack Kaskey of Bloomberg points out that the newly merged Bayer-Monsanto company would control about 70 percent of cottonseed sales in the United States -- so that may be one possible area of focus (and perhaps the new firm will have to divest its cottonseed assets).
In years past, this deal might have been a foregone conclusion, as US regulators regularly waved through similar deals with few changes. But more recently, DOJ has become much more active in scrutinizing agribusiness mergers. As Philpott points out, just two weeks ago, the DOJ halted a deal in which Monsanto would’ve sold its precision planting division to John Deere -- because the latter would have had 86 percent of the market in these technologies. Not an auspicious sign for Bayer.
On the other side of the Atlantic, EU regulators tend to be extremely critical of GM crops, so they may put up even more of a fight. "There is a risk of a lot of regulatory and political scrutiny. We put chance of approval at 50 percent," Jeremy Redenius, an analyst at Bernstein bank, told the Financial Times.
Will Monsanto Keep its Name?
Another question is whether Bayer would keep the Monsanto name if the deal goes through.
After all, the name "Monsanto" carries a lot of baggage, much of it negative. When people express fears about corporate control of food or biotechnology, they invariably point to Monsanto. It’s widely viewed as the company that patents seeds and ruthlessly sues farmers who try to misuse them (even if the reality is considerably less sinister than the perception).
People in the company -- and many crop scientists outside of it -- have long seen that reputation as unfair. To them, the anti-GMO movement has spread a lot of baseless information about genetic engineering and has caricatured onto Monsanto as the face of evil.
The company has tried a series of rebranding moves over the years to burnish its reputation. (Witness this Wired story: "Monsanto Is Going Organic in the Quest for the Perfect Veggie.")
Alas, none of it has flown. A telling anecdote in the New Yorker: In 2013, David Friedberg sold his innovative weather data company, the Climate Corporation, to Monsanto for $1 billion. His own father’s first reaction was: "Monsanto? The most evil company in the world? I thought you were trying to make the world a BETTER place?"
Given all that, Bayer may consider going all in and changing the name entirely. "It is too early to speculate about what the name of the company is going to be," Bayer CEO Werner Baumann said in an interview in May. "But let me tell you that Bayer’s name and Bayer’s reputation stand for science, innovation and an utmost level of responsibility for societal needs, and that is what we are going to leverage on, also for the combined company going forward."
Bayer to Buy Monsanto Creating World's Largest Seed and Pesticide Company, Ecowatch, September 14, 2016.
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