Bayer-Monsanto Deal Outlook Seen Clouded by Election

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By Alexei Alexis

Sept. 14 — The upcoming presidential election complicates the regulatory outlook for Bayer AG's proposed $66 billion acquisition of Monsanto Co., legal analysts told Bloomberg BNA.

Given its size and complexity, the deal is expected to trigger a U.S. regulatory review process stretching well beyond President Barack Obama's administration.

“The timing and likelihood of approval would certainly be complicated if the next administration takes an even more aggressive stance against these sorts of mega-mergers that we’ve been seeing more and more of in recent years,” said Terrence Oved, a co-managing partner at Oved & Oved LLP, based in New York.

Bayer and Monsanto announced their deal Sept. 14, adding to concerns about a wave of consolidation in the agricultural industry. The companies are expected to seek approval in various jurisdictions around the world, including the U.S. and European Union. They're aiming to close the deal by the end of 2017.

In the U.S., while a change in administration typically doesn't affect the government's merger reviews at the staff level, it could impact final decisions, which are made by political appointees, said Maurice Stucke, an antitrust lawyer and former Justice Department official.

“It will affect who the decision makers are,” he told Bloomberg BNA.

A win by Democratic presidential candidate Hillary Clinton might mean less turn over at the department and more continuity in the review process, according to Stucke, a professor at the University of Tennessee College of Law and of counsel at the Konkurrenz Group. “Some of the people from the Obama administration may stay on a little bit longer,” he said.

Clinton Tough on Mergers

Clinton has vowed to appoint antitrust regulators who will be tough on concentrated sectors. She has lent her support to pending Justice Department litigation challenging proposed acquisitions that would consolidate the nation's five biggest health insurers into three.

Clinton's Republican rival, Donald Trump, is largely viewed as a wild card when it comes to the outlook for U.S. antitrust enforcement (157 ATD, 8/15/16).

David Balto, an antitrust lawyer and former policy director at the Federal Trade Commission, said the Bayer-Monsanto deal will likely face a tough road, no matter who wins the presidency.

“The evidence is increasingly becoming clear that the traditional approach of remedying mergers like these with piecemeal divestitures really isn't effective,” Balto said.

The Bayer-Monsanto deal comes as the Senate Judiciary Committee prepares for a Sept. 20 hearing on consolidation in the U.S. seed and agrochemical industry.

“As mergers continue to occur in the seed, agrochemical and fertilizer industries, federal antitrust regulators must be ever more vigilant to ensure a robust competitive environment in this important sector,” Committee Chairman Charles Grassley (R-Iowa) said in a statement reacting to the latest deal announcement.

To contact the reporter on this story: Alexei Alexis in Washington at aalexis@bna.com

To contact the editor responsible for this story: Tiffany Friesen Milone at tmilone@bna.com

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