German chemical giant Bayer’s $66bn (£50bn) deal to buy controversial US agrochemical giant Monsanto and create the world’s largest seeds and pesticides company is “a threat to all Americans” and should be blocked, Bernie Sanders said on Wednesday.
Speaking shortly after the deal was announced, the Vermont senator, who ran against Hillary Clinton for the Democratic presidential nomination, said: “The attempted takeover of Monsanto by Bayer is a threat to all Americans.”
By: Rupert Neate
“These mergers boost the profits of huge corporations and leave Americans paying even higher prices. Not only should this merger be blocked, but the Department of Justice should reopen its investigation of Monsanto’s monopoly over the seed and chemical market.”
He called for the proposed takeover to be blocked and for a fresh investigation into Monsanto’s current control of the seed market.
The proposed deal, the biggest corporate takeover deal so far this year, follows a wave of consolidation in the seeds and agriculture industry and has raised concerns among politicians, scientists, regulators, farmers and activists who called the deal a “marriage made in hell”.
Werner Baumann, chief executive of Bayer, which is most famous for developing aspirin, said “the combination of our two great organizations [will] deliver substantial value to shareholders, our customers, employees and society at large”.
But farmers and environmentalists warned the deal could lead to a reduction in seed variety, an increase in genetically modified crops and higher seed costs and therefore crop and food prices.
The proposed takeover is likely to face intense regulatory scrutiny in the US and Europe, particularly as it quickly follows two other mega-deals in the agriculture industry and would leave control of almost two-thirds of the world’s seeds and pesticides in the hands of three firms.
Analysts at Bernstein Research said they thought there was only a 50:50 chance of the deal winning regulatory clearance. “We believe political pushback to this deal, ranging from farmer dissatisfaction with all their suppliers consolidating in the face of low farm net incomes to dissatisfaction with Monsanto leaving the United States, could provide significant delays and complications,” they said in a research note. Because of the difficulties expected in getting the deal through, Bayer has agreed to pay Monsanto $2bn if the tie-up falls apart because of competition concerns.
Friends of the Earth described the takeover, which will see Bayer pay $128 per share – a 44% premium on Monsanto’s share price before the proposed deal was first revealed in May, as a “marriage made in hell”.
Adrian Bebb, Friends of the Earth’s food and farming campaigner, said the proposed takeover “threatens to further lock in industrialised agriculture at the expense of nature, farmers and the wider public” and warned that “this mega corporation will be doing its best to force damaging pesticides and GM seeds into our countryside”.
Campaigners promised further protests, which have already been held around the world since Bayer made its first approach for Monsanto in May.
They are concerned that the deal could lead to Monsanto, which has been described as “the most evil company in the world” for its role in developing deadly herbicide Agent Orange in the 1960s and more recently its role at the forefront of genetically engineered crops, could introduce GMO seeds in Europe.
Hugh Grant, Monsanto’s Scottish chief executive, hit out at environmentalists saying their concern about GM crops “drives me a little bit nuts” and said they should be more worried about how to feed a fast-growing global population while using less water as global temperatures rise.
“You think about two billion new citizens, you think about a warming planet. You think about water. These are appropriate conversations,” he said in an interview with CNN on Wednesday. “The thing that drives me a little bit nuts. The frustrating piece is this is such a polarized debate. And I don’t think it should be because we’re going to need all these kinds of agriculture.”
John Colley, professor of international business at Warwick Business School said: “Bayer’s acquisition of ‘Frankenstein’ crop producer Monsanto could be a horror story for both Bayer and its customers: the farmers.”
“Apart from Monsanto’s shareholders, who have hit the jackpot, this looks like a lose-lose bid. Bayer have been forced into paying too much and face major integration and competition authority risks.
“The farmers will lose out as product ranges are rationalised and attempts are made to increase prices.”
Bayer’s shares were up 1.3% to €105.60 in afternoon trading in Frankfurt, and Monsanto shares were 1.1% higher at $107.20 in New York.
Originally Posted: theguardian.com