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Bayer buyout of Monsanto raises fears among competitors

Germany-based Bayer plans to take over US seeds group Monsanto. The deal would create the world’s largest integrated pesticides and seeds company but would limit the number of competitors selling herbicides and seeds in Europe. There are concerns the proposed acquisition could reduce competition in a number of different markets resulting in higher prices, lower quality, less choice and less innovation.

A merger would also reduce competition in the market for the genetic traits behind herbicide tolerance, which are typically licensed out to third-party seed companies. In addition, the deal might slow the race to develop new products, such as wheat seeds and herbicides against weeds that have grown resistant to existing products.

There are apprehensions competitors access to distributors and farmers could become more difficult if Bayer and Monsanto were to bundle or tie their sales of pesticide products and seeds, notably with the advent of digital agriculture. Bayer has a plan to create combined offerings of seeds and pesticides with the help of new digital farming tools, which include sensors, software and precision machines.

The proposed tie-up has also hit a raw nerve with some activists who fear such a combination would hurt farmers, consumers and the environment.

 
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