The U.S. Justice Department has recently issued its approval for German chemical company Bayer to acquire Monsanto. The process to merge the two companies originally began in May 2016 and is worth $62.5 billion. The permission from the DOJ is a result of lengthy negotiations concerned with competition. Bayer announced in a statement that it anticipates closing the Monsanto purchase in the second quarter.
In order to meet the requirements to get the merger approved and alleviate anti-trust concerns, Bayer has agreed to sell certain seed and herbicide assets to its competitor BASF for $7.2 billion. Bayer will also be selling its vegetable seeds business and making concessions related to digital agriculture.
The size of the deal between Bayer and Monsanto required the companies to garner approval from regulators in 30 countries. The U.S. now joins Brazil, China, and Australia in its recent endorsement of the proposed merger. The European Union (EU) had given conditional approval of the acquisition back in March. The European Commission now has an April 30 deadline to assess whether BASF is a suitable buyer for the properties.
Representatives from Bayer and Monsanto have noted that the merger would enable the companies to bring better products to market quicker by integrating their research across chemicals, seed breeding, and biotechnology. The two companies have illustrated a plan to spend $16 billion on research and development worldwide over the span of six years.
Some farmers are wearisome about another merger between two sizable companies in the industry. Several industry groups have voiced their opposition to the further consolidation of the agricultural supply industry, particularly after the mergers between Dow and DuPont, and Syngenta and ChemChina. For Bayer to acquire Monsanto, the largest seed company in the world, it would create a single company that has a share of more than a quarter of the worldwide seed and pesticide market.