German drugs and agrochemicals company Bayer said it had replied to queries raised by the Competition Commission of India (CCI) on the possible implications for this country’s agricultural biotechnology sector from its proposed acquisition of Monsanto’s global operations.
Bayer will need approvals from regulators of at least 30 countries it operates in. Of these, it has got approval from 11 countries. And, regulators across 14 countries have set conditional precedents for approvals on the deal.
In India, the integration process is subject to approvals from CCI; Bayer applied to it in early August. “Bayer has responded to various clarifications and explanations sought by CCI. Closing of the integration process in India is linked to the global closing, which shall take place after anti-trust approvals from various jurisdictions,” said Richard van der Merwe, managing director, Bayer CropScience.
According to the terms of the $66-billion acquisition of US-based Monsanto, announced in September last year, Bayer would have to pay a reverse break-up fee of $2 bn if the merger agreement was terminated due to a final order of an anti-trust authority or due to the merger not having closed by June 14, 2018, due to not getting the required approvals.
After the merger, India would be one of the major focus markets for Bayer’s research and development, van der Merwe said.
Bayer is looking to sell its cotton seed business globally but will retain it in India and South Africa. He said Bayer would like to focus on advancement in digital farming after the acquisition of Monsanto.
He added that the government’s fixation of seed prices and royalty payment to global parents of Indian companies hag affected the seed and agrochemical business in India. Currently, Monsanto’s genetically modified cotton seed technology is licensed to 49 companies under Mahyco Monsanto Biotech, an equal joint venture between Maharashtra Hybrid Seed Company and Monsanto Holdings.