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Russian FAS agreed on the merger of Bayer and Monsanto for $ 66 billion

Russian FAS approved the application of Bayer AG (Germany) for a transaction amounting to 66 billion US dollars to acquire 100% of the voting shares of the Monsanto Company (USA), filed in accordance with Article 28 of the Federal Law of the Russian Federation “On Protection of Competition”.

This transaction affects the markets of the following products, the end users of which are agricultural producers:

  • genetic material (seeds);
  • certain plant protection products, in particular nonselective herbicides;
  • digital offers for agricultural producers.

Bayer and Monsanto are vertically integrated, high-tech, full-cycle companies that include both research and development and sales of these inputs to farmers.

The transaction, according to the FAS, will lead to the creation of the largest entity in these commodity markets on a global scale. The unified company will have unique opportunities for building market power.

As the most balanced solution that meets the objectives of the protection of competition and does not create insurmountable obstacles to the transaction, FAS Russia chose to establish behavioral requirements aimed at creating conditions for the development of potential competition with Russian companies by providing them with an effective transfer of affordable and applicable in the Russian agroclimatic conditions technology combined with access to data and knowledge necessary to create new varieties and hybrids for key crops, for which the Russian market of genetic material is most dependent on imported supplies, as well as on decisions in the field of digital agriculture.

The order of the FAS is aimed at ensuring that those Russian companies, which in one form or another are present in the market of selection technologies, have the opportunity to compete with Western monopolists. Now plant breeding is based on the analysis of genetic data, which Russian breeding centers and companies have not in enough quantities. It is expected that, at least now, they will be able to use the data and technologies of Bayer.

In order to meet these conditions, Bayer AG has concluded an agreement with HSE in order to ensure and monitor the transfer of technology, including on the basis of a non-exclusive license, and to ensure non-discriminatory access to digital agronomic platforms. The Center for Technology Transfer (TST) of the National Research University “Higher School of Economics” will coordinate the transfer of technology. The Center will select the interested recipients of the technology transfer and monitor the implementation of the prescription.