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Competition Commission of India okays Bayer-Monsanto merger but with riders

It said the merged entity will follow a policy of non-exclusive licensing of non-selective herbicides or their active ingredient(s)

Sanjeeb Mukherjee  |  New Delhi 

The firms are in a race to create new clubroot-resistant seeds, but all three firms say that the process takes most of a decade - and any solution may not last long because the clubroot pathogen quickly adapts.

The merged Bayer-Monsanto entity in India will need to give non-exclusive licensing of its genetically modified (GM) and non-GM traits, currently commercialised in India or to be introduced in the near future on a fair, reasonable and non-discriminatory basis, the Competition Commission of India (CCI) has said.

Approving the merger of Bayer and Monsanto in India, the released conditions attached with the approval.

It said the merged entity will follow a policy of non-exclusive licensing of non-selective herbicides or their active ingredient(s).

It will be in the case of launch of new GM or non-GM traits in India that restrict agricultural producers, including farmers, from using specific non-selective herbicide(s) being supplied only by the parties, on a fair, reasonable and non-discriminatory basis.

The merged entity will also grant access to Indian agro-climatic data, free of charge, to the central government and its institutions, to be used exclusively for public good, the said.

Read more: Bayer begins process to buy up to 26% stake in Monsanto for over Rs 13 bn

The order also said that the combined entity is also barred from offering its clients, farmers, distribution channels or its commercial partners, two or more products as a bundle as this may potentially have the effect of exclusion of any competitor.

The commission asked Bayer to divest its glufosinate ammonium (a non-selective herbicide), crop traits of cotton and corn, and hybrid seeds of its vegetables businesses.

It also ordered that Monsanto should divest shareholding in Maharashtra Hybrid Seed Company Limited (26 per cent) to an independent entity. Bayer is also supposed to honour these changes for seven years from culmination of the deal.

CCI’s approval of the $66 billion deal, proposed in September 2016, will make the merged entity the world’s largest seed and pesticide player.

Read more: EU says Bayer Monsanto must not hurt competition in digital farming

Russia, have already approved their merger.

EU has stipulated, among other conditions, Bayer will have to exit global field crop seeds businesses such as canola, cotton, and soybean, R&D platform for hybrid wheat, global vegetable seeds business, global glufosinate ammonium business as well as certain glyphosate-based herbicides business in Europe.

Russia’s Federal Anti-monopoly Service (FAS) has also given approval on the condition that be provided modern technologies from Bayer and Monsanto.

First Published: Thu, June 21 2018. 07:04 IST