Bayer’s acquisition of Monsanto, valued at more than $60 billion, will be allowed to go through, the Justice Department said this week. The merger will make the German pharmaceutical company the world’s biggest supplier of pesticides, herbicides, and seeds.
The deal, which was first announced in September 2016, was postponed due to antitrust laws. Each of the agricultural giants has pledged to sell off assets in order to comply with regulations, the Wall Street Journal reports.
“As we’ve said from the beginning, this opportunity is about combining highly complementary businesses and bringing new innovative solutions to our customers,” Bayer said in a statement. “We remain confident in our ability to obtain all necessary regulatory approvals and look forward to continuing to work diligently with regulators to support that process. We anticipate closing in second quarter 2018.”
The European Union had already given its approval of the deal last month, after Bayer agreed to sell more than $7 billion worth of assets, including its glufosinate weedkiller, which competes against Monsanto’s glyphosate-based Roundup. The companies still need to earn approval in Canada and Mexico before the deal can be finalized.
While Bayer and Monsanto both claim that the merger will lead to greater innovations in agriculture, Business Insider reports that small family farms will likely be hurt by the deal.
“From my perspective, they’re saying the exact opposite of what most people in the industry actually believe,” Clay Govier, a farmer in central Nebraska, told the outlet.
“They’re locking in their profit and they’re cornering the market by getting bigger, not by creating new products,” he said. “They’re just choking out the rest of the competition.”
This deal is only the latest to consolidate major players in the $100 billion crop seed and chemical market: last year, Dow Chemical and DuPont merged their agricultural divisions, while Syngenta was sold to China National Chemical Corp. This narrowing of the industry “is not a prescription for healthy, competitive agricultural markets” according to a letter written to the Justice Department last year by officials from the National Farmers’ Union, the American Antitrust Institute, and Food & Water Watch.
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