Bayer-Monsanto merger gets approval in most developed markets; eyes on India now

With Russia's Federal Antimonopoly Service (FAS) approving the merger of German agro-chemical major Bayer and US seed producer Monsanto in April, attention has shifted to India's anti-monopoly watchdog Competition Commission of India (CCI), where regulatory scrutiny on the possible impact of the $62 billion global deal on the India businesses of Bayer and Monsanto is still on.

The merger deal, which saw Bayer acquiring 100% stake in Monsanto, has already received regulatory approvals from China and European Commission. Reports suggest that the US, the other key market for these companies, is also close to giving its nod. India's decision is awaited.

In India, Bayer operates its crop science business through its subsidiaries, Bayer CropScience Limited, Bayer Seeds Private Limited, Bayer BioScience Private Limited and Bayer Vapi Limited. Monsanto is present in India through its subsidiaries, Monsanto India Limited, Monsanto Holdings Private Limited, Monsanto Investments India Private Limited and Mahyco Monsanto Biotech (India) Private Limited. Monsanto also indirectly holds a minority shareholding of 26% in Maharashtra Hybrids Seeds Company Limited (Mahyco). The implications of the global merger on these entities are being investigated by the CCI.

Incidentally, like FAS, the CCI had also expressed concerns similar to that raised by its Russian counterpart in the initial stages of the merger scrutiny. The prima facie opinion of both regulators was that the transaction could impact competition in their respective jurisdictions. While FAS had made its observations in November 2016, leading to a lengthy discussion and negotiation with Bayer, India's CCI had sought public comments on the combination and its likely adverse effect on competition in January 2018.

One of the key conditions put forward by the FAS for approving the Russian leg of the deal was technology transfer to allay the fears of monopoly in seed and agro chemical business. Russian news agency TASS quoted Igor Artemyev, head of the FAS on April 20 to state that the approval happened on the condition that Russia will receive modern technologies from Bayer and Monsanto.

The progress of CCI proceedings is not known though several of the public comments that have reached the anti-monopoly watchdog echo similar suggestions. For instance, All India Kisan Sabha (AIKS), in a representation to CCI had sought an extension of the deadline for submission of suggestions. "AIKS believes that with the merger, the monopoly will be further consolidated and questions of technological choice, economic fairness and goal of ensuring quality inputs at affordable rates, environmental sustainability would all be at stake. The role of peasants and rural labour in agro-food value chain will be severely constrained, diminish..." the letter states.  According to AIKS, India's farming community is the largest seed producer of the country with nearly 70% of seeds coming from the informal sector. The association sought time to collate farmer testimonies to highlight ground realities.