Market News & Headlines >> Brazil Regulator Concerned About Bayer-Monsanto Deal

Brazilian regulators have voiced concerns that the proposed purchase of Monsanto Co. by Germany’s Bayer AG could be detrimental for competition in the seed/biotech industry and urged conditions for approval of the merger. 

The General Superintendence of the Administrative Council for Economic Defense (CADE), in a document posted on the agency’s website, said the transaction "generates a significant horizontal concentration, especially in the markets of soybean seeds and transgenic cotton (biotechnology), important cultures to the country's economy, since it merges two of the main competitors in the world, in an already significantly concentrated scenario and with high entry barriers." 

CADE said solutions included creating or strengthening another player to compete in the markets for soy and cotton seeds and in the sphere of biotech development. But the agency has not engaged in an in-depth discussion with Bayer and Monsanto related to its suggested "remedies," the document said. 

CADE’s administrative tribunal has 240 days from April 24, when the agency began its review of the deal, to announce a ruling. That would be Dec. 20, but  CADE could extend its review period by an additional 90 days. 

In an emailed statement to Reuters News Service, Bayer said CADE’s opinion is non-binding and does not mean the transaction will be blocked. Monsanto CEO Hugh Grant said concerns expressed by CADE are a normal step in the review process.