Bayer AG won US antitrust approval for its $66 billion takeover of Monsanto Co., clearing the last major regulatory hurdle to forming the world’s biggest seed and agricultural-chemicals provider after a nearly two-year global review.
The companies reached a settlement with the Justice Department (DoJ) that resolves the government’s concerns that the merger as initially structured would harm consumers and farmers.
The agreement requires the sale of assets to BASF SE that Bayer has previously announced. The divestiture package is worth about $9 billion, the largest in a U.S. merger enforcement case, the government said.
“America’s farm system is of critical importance to our economy, to our food system, and to our way of life,” Makan Delrahim, the head of the department’s antitrust division, said on a call with reporters. “American farmers and consumers rely on head-to-head competition between Bayer and Monsanto.”
For Bayer, acquiring Monsanto is the last step in a corporate transformation as the 154-year-old company shed its plastics business and remade itself as a life-science company with equally-sized health and agriculture units.
Once the deal is through, three global behemoths will dominate the world’s agriculture industry, a prospect that has left farmers worried about the possibility of higher prices and less choice.
National Farmers Union, the second-biggest U.S. farmer group, criticized the Justice Department Tuesday for “continued rubber-stamping” of mergers in food and agriculture.
“This extreme consolidation drives up costs for farmers and it limits their choice of products in the marketplace,” the group said in a statement. “We will now focus our efforts on ensuring the promises made by Bayer and Monsanto throughout this approval process are kept.”
California officials said on Tuesday that they would “carefully” examine the Justice Department agreement. The state’s attorney general, Xavier Becerra, said in a statement that “this deal could further suffocate competition in the agricultural sector.” State attorneys general have the authority to challenge mergers in court.