Bayer Consents to Give Assets to Russia for Monsanto Deal

Stay current on the latest developments from agencies including the CFPB, Federal Reserve, FDIC, and OCC to advise clients on real-life regulatory situations.

By Eleanor Tyler

The U.S. is the last major regulatory hurdle before Bayer AG’s merger with Monsanto Co. can close after the parties reached a deal with the Russian Federal Antitrust Service (FAS).

Bloomberg reported that Bayer worked out a deal with the Russian regulator April 20 to transfer certain assets to Russia. FAS had delayed approving the transaction until the merged company agreed to share technology and data with the country. It’s the first time Russian authorities have demanded corporate secrets in exchange for access to the local market.

The approval brings Bayer a step closer to closing its purchase of Monsanto. A Bayer spokesman told Bloomberg Law that the deal is on target to close in the second half of 2018.

Long Battle

The deal has already been pending for 19 months. The parties announced the merger in September 2016. Shareholders cleared the deal relatively quickly, but as global companies, Bayer and Monsanto needed regulatory clearance in a broad swath of jurisdictions.

Those approvals have been slow for a number of reasons. The scope of the merger and the high concentration in the agrochemical industry, dictated a lengthy and complex review. In smaller jurisdictions with fewer resources, the size of the merger and importance of the agricultural sector posed a challenge.

Besides the Russian clearance, the deal has garnered some important regulatory approvals. China conditionally approved the deal on March 13, and the EU cleared the merger conditioned on substantial divestitures on March 21. Brazil conditionally approved the deal in February.

India, where the merger is still waiting on clearance, presents a more complex problem. The Delhi High Court last week dealt Monsanto a blow in ruling its genetically modified cotton seed is not eligible for Indian patent protection.

A Monsanto spokeswoman told Bloomberg Law that the company will appeal the ruling to India’s Supreme Court upon receipt of the lower court’s order. But the ruling, for now, casts more concern on Monsanto’s Indian operations, and modern agrochemical more generally in the country, than the slow merger approval.

To contact the reporter on this story: Eleanor Tyler in Washington at etyler@bloomberglaw.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com

Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Antitrust on Bloomberg Law