Event Driven Takeaways
- The DOJ decision on its review of the merger will not be finalized this week.
- A plan to divest assets to BASF received positive initial reviews by the Antitrust Division, and positive feedback from the front office.
- The European Commission extended its Phase II deadline by five business days. Decisions by agencies in China, Australia, Russia, Brazil, and India are also pending.
The DOJ will not make a final decision on the Monsanto/Bayer deal until next week at the earliest, Event Driven has learned. Senior staffers at the Antitrust Division had positive remarks at an internal meeting this past Friday, Jan. 26, about the companies’ offer to
sell assets to BASF, Event Driven has also learned.
DOJ antitrust chief Makan Delrahim will be in China this week and no final civil enforcement decisions are expected in his absence.
The Justice Department has also begun reviewing BASF’s operating and production facilities to make sure the company would be able to compete effectively in the businesses it has separately agreed to purchase from Bayer on
Oct. 13, 2017, Event Driven has learned.
The DOJ normally examines the buyers of any divestitures to make sure they would be able to operate the purchased units at a comparable financial, operational, and managerial level as the original company. “The DOJ wants companies to tell them ‘If we get this, here’s how we’ll integrate them,’” an antitrust practitioner with government experience told Event Driven.
BASF is one of a handful of companies large enough to compete with Bayer and Monsanto post-merger. “It’s much more appealing to have someone who is a big-name, established player,” the former DOJ attorney told Event Driven. “It’s much easier for a buyer to compete who is already a big name in the industry.”
Bayer has also begun examining possible buyers for some of its vegetable seed lines, as
previously reported. Bayer’s original agreement with BASF left untouched overlaps with Monsanto in these lines. It is unclear what specific additional assets Bayer is considering divesting and whether the parties have discussed those assets with the DOJ.
In addition to the DOJ’s extended review, the European Commission’s Phase II deadline has been extended five working days to March 12. When the final decision deadline is extended, the deadline for parties to submit commitments to the commission is automatically extended by the same number of working days. Event Driven has learned that parties may submit commitments within 65 days of the proceeding initiation; therefore Bayer has until Monday, Feb. 5, to submit commitments to the EC.
The companies continue to expect their transaction to close in early 2018.
Event Driven’s coverage of this transaction can be found
HERE.
--Matt Tracy, Nat Baker, and Hannah Deichman