OTTAWA -- The Competition Bureau announced recently that it has reached an agreement with Bayer AG (Bayer) related to its proposed acquisition of Monsanto Company (Monsanto). This agreement addresses the Commissioner of Competition's concerns that the proposed transaction would have significantly harmed competition and innovation in Canada's agricultural sector.
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Following an extensive review, the Bureau concluded that the proposed acquisition would likely substantially lessen and prevent competition in Canada with respect to the supply of canola seeds and traits, soybean seeds and traits, seed treatments that protect crops against nematodes, and carrot seeds.
To address those concerns, the agreement requires Bayer to sell its canola seed and traits business, soybean seed and traits business, carrot seed business, nematode seed treatment business, glufosinate-ammonium herbicide business, LibertyLink herbicide tolerance technology, assets related to the Centurion herbicide, and digital farming business in Canada. Bayer has proposed BASF SE as the buyer of the assets under the agreement. The Bureau is actively reviewing the suitability of BASF as the proposed buyer of these assets.
The Bureau is satisfied that the agreement will preserve competition and innovation in important agricultural inputs such as canola seeds, Canada's highest acreage crop.
"Agriculture has always been a critical part of the Canadian economy, and innovation remains as important in this industry as in emerging sectors. This agreement with Bayer will protect competition and innovation in Canada's agricultural sector, and is the result of a collaborative approach with the parties and our international counterparts," said John Pecman, Commissioner of Competition.
Given that Bayer and Monsanto's businesses operate in many countries and the global nature of the transaction, the Bureau coordinated its review with other jurisdictions, including the European Commission and the U.S. Department of Justice (U.S. DOJ). The Bureau's strong relationships with the European Commission and the U.S. DOJ resulted in an efficient review of this matter.
On September 14, 2016, Bayer and Monsanto signed a definitive agreement under which Bayer proposed to acquire Monsanto for US$128 per share. The offer price valued Monsanto at US$66 billion. Bayer is a global pharmaceutical, consumer health, animal health and crop protection science company headquartered in Leverkusen, Germany.
Monsanto is a global provider of agricultural products headquartered in St. Louis, Missouri.Bayer's LibertyLink herbicide tolerance trait can be found in approximately 55% of canola seeds sold in Canada and Monsanto's Roundup Ready trait can be found in approximately 40% of these seeds.
According to the Canola Council of Canada, the canola industry contributes $26.7 billion per year to the Canadian economy.
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.
SOURCE Competition Bureau
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