U.S. to approve Bayer-Monsanto deal, report says
Bayer shares rose nearly 5% on Tuesday following a report that the U.S. Justice Department will allow the German drugs and pesticides group to acquire U.S.-based Monsanto (NYSE:MON) in a US$62.5 billion deal, Reuters reported.
The Justice Department reached an agreement in principle with Bayer and Monsanto in recent days after the companies agreed to sell more assets, the Wall Street Journal said on Monday, citing people familiar with the matter.
Under the deal, Bayer agreed to sell additional seed and treatment assets to BASF (BASFn.DE) and agreed to make concessions related to digital agriculture, it said.
Monsanto's shares also rose about 6% following the report.
The takeover, one of a trio of major deals in the agribusiness sector in recent years, would create a company with a share of more than a quarter of the world’s seed and pesticides market.
The deal reduces competition for sales of seeds and chemicals to farmers struggling with low crop prices, raising the risk for price gouging, said executive director for advocacy group Food & Water Watch, Wenonah Hauter, according to Reuters.
“The Justice Department’s paltry divestment approach does little to address the extreme control the merged firm will have over farmers’ data, genetics, biotechnology traits or the associated agrichemical industry,” she was quoted as saying.
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