As three large agrochemical deals—the Dow Chemical-DuPont merger, Bayer’s purchase of Monsanto, and ChemChina’s buy of Syngenta—languish in front of antitrust regulators in the U.S. and Europe, the companies are going on a charm offensive in an effort to convince officials that their mergers will benefit farmers.
Bayer CEO Werner Baumann and Monsanto head Hugh Grant met earlier this month with president-elect Donald Trump in New York City to pitch their deal and promise R&D investment.
“The combined company expects to spend approximately $16 billion for R&D in agriculture over the next six years, with at least half of this investment made in the U.S.,” the companies said, noting that investment would create “several thousand new high-tech, well-paying jobs.” The companies said they would make St. Louis their global seeds and traits R&D headquarters.
The Trump transition team touted the pledges. However, it isn’t clear if Bayer and Monsanto are merely promising to do what they intended to do anyway. During their most recent fiscal years they spent a combined $2.7 billion on agriculture R&D, a level that would add up to more than $16 billion over six years.
The European Commission appears increasingly concerned about the Dow-DuPont deal’s impact on innovation. According to the , the EC submitted an 800-page statement of objections to the two companies dwelling on whether having one less large competitor in seeds and agricultural chemicals would be detrimental to technological progress. The EC declined to comment.
Certainly, technology has been a theme for the EC for a while. In August, it pointed to innovation in crop protection when it launched an in-depth investigation into the merger. These concerns were reiterated by Competition Commissioner Margrethe Vestager in an interview with Bloomberg earlier this month after Dow and DuPont made their case for the deal behind closed doors. “The outcome of the merger, of course, is still very open,” she noted.
Meanwhile, Syngenta CEO Erik Fyrwald sounded upbeat about his company’s takeover by ChemChina. “We are working well with the U.S. and the EU regulators now toward finalizing agreements with them,” he told a CNBC reporter on the sidelines of the World Economic Forum in Davos.