A new legal opinion, written by two former Justice Department officials from the Antitrust Division, argues that a merger between Bayer and Monsanto would violate the Clayton Act, a law enacted by Congress to curb anti-competitive business practices.
According to the white paper, a Bayer-Monsanto merger would also be in direct violation of a 2008 court order, where Monsanto was forced to divest itself of certain cottonseed and cotton breeding assets, which were sold to Bayer. If the merger proceeds, Monsanto would re-acquire these anti-competitive traits, thereby violating the US Department of Justice’s judgement.
The legal opinion points out that:
- The merger would eliminate direct competition between two of the largest players in the traited seed sector, with direct consequences for seed development, herbicide markets, and innovative and open research and development.
- A merger will mean the new Bayer-Monsanto conglomerate will control nearly 70% of the cotton acreage in the United States – unacceptably high by antitrust standards. It would also have unacceptable market concentration in wide swaths of commercial seed development and sales for other commonly used varieties, including traited canola, soybeans, and corn developed in North America.
- The new corporation would likely lead to higher input prices, with less choice and higher food prices for consumers, and fewer non-biotechnology options available to farmers and consumers.
“A merger between Bayer and Monsanto is a five-alarm threat to our food supply and to farmers around the world,” explained Anne Isakowitsch, Senior Campaigner with SumOfUs. “This new mega corporation would be the world’s biggest seed maker and pesticide company, defying important antitrust protections, giving it unacceptable control over critical aspects of our food supply -- undermining consumer choice and the freedom and stability of farmers worldwide.”
SumOfUs, an international corporate watchdog, released the legal opinion as Bayer, a German chemical and pharmaceutical giant, increases its efforts to acquire Monsanto, one of the world’s largest producers of chemicals and farm inputs.
More than 500,000 SumOfUs members around the world have signed onto a petition opposing the potential merger of Monsanto and Bayer.
The legal opinion was written by Maurice E. Stucke and Allen P. Grunes, counsels at the Konkurrenz group. Maurice Stuck is a law professor at the University of Tennessee, with twenty years’ experience handling a range of competition policy issues in both private practice and as a prosecutor with the Antitrust Division of the US Department of Justice. Allen Grunes spent more than a decade at the US Department of Justice Antitrust Division, where he led many merger and civil non-merger investigations in radio, television, newspapers, motion pictures, and other industries.
(Source: SumOfUs)
