Top officials for Monsanto and Bayer defended their proposed $66 billion merger before skeptical senators Sept. 20, insisting that the deal would lead to greater investments in technology that could help American farmers, writes Mary Clare Jalonick of the Associated Press.
Monsanto, the American seed and weed-killer, and Bayer, the German medicine and farm-chemical maker, responded to concerns from Iowa Sen. Charles Grassley, the Republican chairman of the Senate Judiciary Committee.
Grassley warned that consolidation and competition in the U.S. seed and agrochemical industry could hurt American farmers who are already dealing with an economic downturn.
“I’m afraid this consolidation wave has become a tsunami,” Grassley said as the hearing opened.
After months of negotiations, St. Louis-based Monsanto Co. last week accepted an offer from Leverkusen, Germany-based Bayer AG that will pay $57 billion to Monsanto shareholders and assume $9 billion in Monsanto debt. The deal combines two of the six U.S. and European companies that dominate the agrochemical market, and would create a global agricultural and chemical giant with a broad array of products.
Robb Fraley, executive vice president and chief technology officer of Monsanto, and Jim Blome, president and CEO of Bayer CropScience North America, both testified that the combined investment is needed to meet a rising food demand.
“This type of change enables more innovation and delivers better products to the farm even faster,” Fraley said. “Farmers are best served when companies invest more in new technologies and accelerate the pace of their (research and development), which in turn spurs robust competition.”
Blome noted that Monsanto has a greater presence in North America while Bayer’s business is greater outside of North America.
Source: www.croplife.com