Event Driven Takeaways
- The European Commission is finishing up its review of Bayer’s latest commitments for approval of the Monsanto deal, examining the adequacy of Bayer’s digital farming licensing proposal and assessing potential buyers of Bayer’s Nunhems vegetable seed assets.
- According to two sources, the EC will this week enter the so-called interservice consultation phase of its review, the last stage before member-states’ competition authorities cast their final votes on the deal.
The European Commission is nearing the interservice consultation phase of its Bayer/Monsanto antitrust review, according to a source close to the review and a source who has been in contact with the EC. The source close to the review noted that the commission will likely issue an official decision on the deal within days of the EC’s April 5 deadline.
As the commission enters the final stages in its review of Bayer’s most recent commitments, EC staff are finishing making any necessary tweaks to the proposed remedy package and reviewing potential buyers of assets to be divested by the companies, the two people said.
The commission is then expected to turn within the coming week to the interservice consultation phase of its review, where staff at other EC Directorates-General will provide input to the DG of Competition in its decision on the deal. According to the EC’s
legislative procedure guide, the goal of this step is to “ensure that all aspects of the matter in question are taken into account.” However,
disagreement between the DGs on a merger decision is “very rare,” according to the source close to the review, who has experience with EC merger reviews.
After the interservice consultation phase, representatives from the competition authorities of the various EU member-states will come together in Brussels to vote on the merger. Votes are decided by a simple majority, according to Article 19(6) of
the EC merger regulation. Known as an Advisory Committee meeting, this vote is unique to investigations that have reached Phase II.
While Bayer officially submitted its latest commitments to the EC on Feb. 2, the commission and companies began discussing these proposed remedies “much earlier” than that, according to the source close to the review.
The companies had “a lot of feedback” from the commission leading up to these latest commitments, the source said. “What was finally offered - without feedback from the market - the commission is probably going to be all right with.”
Commission staff began seeking comments from third parties about these commitments on Feb. 5 and 6, reaching out to a variety of professors, economists and relevant market participants for their feedback, according to several sources close to the discussions.
“Right now, the commission is looking for any evidence of what was said in its statement of objections,” the source close to the review said, noting that the commission had not made any changes to its statement of objections since first issuing them on
Aug. 22.
It is not known exactly how the commission will weigh input from third parties when reaching its final decision. As the source close to the review noted, “A lot of these groups are not going to form what the EC ultimately decides to do.”
As Event Driven
previously reported, several of these third parties returned comment to the commission on Feb. 8 and 9. ETC Group founder Pat Mooney - as well as other experts on the agricultural policy panel known as IPES Food - received questions from the commission on Feb. 6 regarding the adequacy of Bayer’s commitments to address antitrust issues with the combined company’s digital farming platforms.
According to both Mooney and the source close to the review,
Bayer offered to give rival BASF a “non-exclusive license” to its digital farming platform as a condition of the merger. Mooney and the source close to the review said that previous reports about an “exclusive license” to BASF were false.
Mooney and the others contacted at IPES returned comment to the commission on Feb. 8 and 9, saying that the BASF licensing arrangement did not satisfy their antitrust concerns with digital farming. “Both companies would have to surrender their digital platforms for this to be more acceptable,” Mooney told Event Driven last week. “Although this is a very interesting step in the right direction.”
The commission and DOJ have also turned to considering appropriate buyers for Bayer’s global Nunhems vegetable seed business, making sure that the buyer would not itself hinder competition post-merger, according to Mooney and the source close to the review.
“The EC would love someone with no preexisting seed business,” the source close to the review told Event Driven, noting that the commission has contacted “several players” about Nunhems. According to Mooney, EC staffers have given consideration to potential buyers from the Netherlands, Japan and France who have expressed interest in the Nunhems business, including the seed company Vilmorin.
As this publication also
previously reported, the commission and DOJ have increased their coordination on reviews of deals under this Trump administration.
According to the source close to the review, “someone quite senior at the EC” met with a DOJ official about Bayer’s commitments shortly after the company offered them to the commission on Feb. 2. As Event Driven previously reported, senior staff at the DOJ met with representatives of BASF to discuss its purchase of Bayer assets in late January.
DOJ antitrust chief Makan Delrahim left for Europe late last week to meet with EC Commissioner Margrethe Vestager and German antitrust chief Andreas Mundt. Delrahim
previously told Event Driven that the agencies’ reviews of Bayer/Monsanto “may come up” at this meeting, which two sources close to the matter said took place on Feb. 20.
Also,
staff at the EC and DOJ have exchanged comments about the deal in weekly calls “for a while,” according to the source close to the review.
Neither Bayer nor Monsanto could be reached for comment in time for this story’s publication, while the DOJ and EC declined to comment.
--Matt Tracy