Merger Arbitrage Blog

Translated Russia FAS Publication Regarding Bayer/Monsanto Merger Case

Title: Moscow Arbitration will hold hearings on the dispute between Bayer and FAS because of a deal with Monsanto

Date: 11 April 2018

The Moscow Arbitration Court will hold repeated preliminary hearings on Wednesday on the statement of the German chemical concern Bayer, demanding that the decision of the Federal Antimonopoly Service of Russia regarding the merger of Bayer with the American Monsanto be illegal.

Bayer agreed to acquire an American herbicide manufacturer and genetically modified Monsanto seeds for $ 66 billion in September 2016. The German company reported that it expects the deal to close in early 2018. Several regulators have already approved the deal.

By the challenged decision of November 7, 2017, the FAS extended the period for considering the application of Bayer for approval of the transaction and put forward a precondition to the concern. Within three months, the Concern must conclude an agreement with the Russian organization for the transfer of technologies in the field of breeding, as well as providing access to databases in the field of digital agriculture (the agreement must enter into force after the transaction is closed). The company challenged the injunction by filing an application with the court on February 8, 2018. The third parties include Monsanto, Monsanto International and Monsanto Rus.

At the first preliminary hearing of the court in March, the representative of Bayer stated that the company is actively negotiating with the FAS, and asked to postpone the hearing for a possible peaceful settlement of the dispute. Later, Deputy Head of the Federal Antimonopoly Service Andrei Tsyganov said that the parties had come to an understanding, and the head of the department Igor Artemyev said that FAS on April 12-13 will hold a regular meeting with the management of Bayer and Monsanto, where it is planned “to sum up some results and move on to the completion of the deal” .

When considering the transaction, FAS in early November 2017 concluded that it could lead to a sharp increase to the dominance of the combined company in all affected markets in Russia and the creation of high barriers to entry of other companies. In this regard, the service ordered companies to share technology for seed markets and digital agriculture, in particular in the field of breeding, within three months.

Tsyganov said in February that the agency extended the deadline for consideration of the transaction for six months. Later, he explained that Bayer challenged the preconditions of the FAS. In turn, Bayer reported that the filing of the claim is “procedural in nature” and will not affect the possibility of negotiations to reach a mutually beneficial agreement with the FAS. The German concern also stated about the continuation of its activities in Russia and its intention to do everything possible to successfully complete the deal with Monsanto in Russia.

Original Link: © 2016 Frontier Theme