Milling & Baking News - June 5, 2018 - 17


D.O.J. sets parameters for
potential Bayer-Monsanto merger
WASHINGTON - The U.S. Department of Justice on May 29 said Bayer
AG must divest businesses and assets collectively worth approximately $9 billion before the government
agency will approve a proposed $66
billion acquisition of Monsanto Co.
"This comprehensive
structural solution to
and vertical competition
concerns - the largest
merger divestiture ever
required by the United
States - preserves competition in the sale of
these critical agricultural products
and protects American farmers and
consumers," said Makan Delrahim,
assistant attorney general in the Antitrust Division. "We commend the
parties for working with the Antitrust Division to resolve our concerns on behalf of American consumers."
The announcement came after
the D.O.J.'s Antitrust Division filed
a civil antitrust lawsuit in the U.S.
District Court for the District of
Columbia to block the proposed
transaction. At the same time, the
Antitrust Division filed a proposed
settlement that, if approved by the
court, would resolve its competitive
concerns with the potential merger.
The D.O.J. said that without the
agreed-to divestitures, the proposed
merger of the two ag giants likely
would result in "higher prices, lower
quality and fewer choices across a
wide array of seed and crop protection products." The department also
claimed that the merger may threaten to stifle the innovation in agricultural technologies that "has delivered significant benefits to American
farmers and consumers."
Under the terms of the proposed
settlement, the D.O.J. has ordered
Bayer to divest its cotton, canola,
soybean and vegetable seed businesses, as well as Bayer 's Liberty
herbicide business, a key competitor
of Monsanto's Roundup herbicide.
Additionally, the settlement requires structural divestitures to
remedy the competitive harm that
the D.O.J. believes would result
from the vertical integration of certain significant Bayer seed treatment businesses with Monsanto's
leading seed businesses. /

"Additionally, because Bayer and
Monsanto currently compete to develop new products and services,
the settlement requires the divestiture of certain intellectual property
and research capabilities, including 'pipeline' R.&D. projects," the

D.O.J. said. "Finally, in order to fully prevent competitive harm from
the merger, the settlement requires
the divestiture of additional complementary assets that are needed
to ensure that BASF has the same
innovation incentives, capabilities
and scale that Bayer would have as
an independent competitor including, most notably, Bayer 's nascent

'digital agriculture' business."
Bayer expects to sell the agricultural businesses and assets to chemical giant BASF.
"Receipt of the D.O.J.'s approval
brings us close to our goal of creating a leading company in agriculture," said Werner Baumann, chief
executive officer of Bayer. "We want
to help farmers across the world
grow more nutritious food in a more
sustainable way."
The proposed settlement will be published
in the Federal Register. Any person may
submit written comments concerning the
within 60 days of its
publication to Kathleen S. O'Neill,
Chief, Transportation, Energy &
Agriculture Section, Antitrust Division, U.S. Department of Justice, 450
Fifth Street, N.W., Suite 8000, Washington, D.C. 20530. At the conclusion of the 60-day comment period,
the court may enter the final judgment upon a finding that it serves
the public interest. MBN

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Milling & Baking
June 5, 2018 / 17

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