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Bayer, Monsanto integration can now commenceBayer, Monsanto integration can now commence

Legal remedies against jury verdict in California announced.

Krissa Welshans 1

August 16, 2018

3 Min Read
Bayer, Monsanto integration can now commence
Bayer and Monsanto

The integration of Monsanto into the Bayer Group can begin following the recent completion of the divestment of certain Bayer Crop Science businesses to BASF, Bayer announced Thursday.

Bayer became the sole owner of Monsanto on June 7, but the U.S. Department of Justice (DOJ) required the two companies to remain separate and continue operating separately until the divestments to BASF were completed.

“The acquisition of Monsanto gives rise to a leading agriculture company with a high level of innovative strength, a strong product portfolio and the highest ethical standards,” Bayer said.

As previously communicated, Bayer expects that the acquisition will start make a positive contribution to core earnings per share already in 2019, with a double-digit percentage from 2021 onward. From 2022, annual contributions of $1.2 billion to earnings before interest, taxes, depreciation and amortization before special items are planned from synergies. Moreover, Bayer will further strengthen its commitment to sustainability, the company said.

California Roundup verdict

Last week, a California jury ordered Monsanto, maker of Roundup, which contains the chemical glysophate, to pay $289 million to a former school groundskeeper dying of cancer. Now that the integration is underway, Bayer offered some comments on the recent verdict, saying it now has the ability “to become actively involved in defense efforts in the glyphosate trials as well as any other legal disputes, such as potential claims for damages in connection with the product dicamba.”

Bayer said it believes that the jury’s decision is “at odds with the weight of scientific evidence, decades of real-world experience and the conclusions of regulators around the world that all confirm glyphosate is safe and does not cause non-Hodgkin’s lymphoma.”

Further, Bayer said the National Institutes of Health recently reaffirmed that glyphosate does not cause cancer. The U.S. Environmental Protection Agency, the European Food Safety Authority, the European Chemicals Agency and other regulators around the world have also concluded that glyphosate can be used safely, the company added.

Bayer said the jury’s verdict is just the first step in this case, and it remains subject to post-trial motions in the trial court and to an appeal, as announced by Monsanto.

“As this case proceeds, Bayer believes courts ultimately will find that Monsanto and glyphosate were not responsible for Mr. Johnson’s illness,” the company said.

Opposition to merger continues

A coalition of farming, consumer and environmental groups delivered public comments to DOJ this week urging the agency to reject the Bayer and Monsanto merger. The agency closed the comment period on its conditional approval of the merger on Aug. 13.

The groups argue that the merger threatens competition and innovation in the food system, compromises the future sustainability of agriculture and harms farmers, agricultural workers and consumers. Regardless of the divestitures DOJ is requiring of Bayer, the merger could significantly reduce farmer seed choice, decrease the quality and diversity of seeds and increase prices, the groups allege.

The groups, including Friends of the Earth, Natural Resources Defense Council, Farm Aid, Family Farm Defenders, Consumer Federation of America and ActionAid USA, delivered 97,325 comments signed by farmers and people across the country urging the agency to reverse its decision and reject the merger.

“This toxic mega-merger would be disastrous for people, pollinators and the planet,” said Tiffany Finck-Haynes, senior food futures campaigner of Friends of the Earth. “It’s critical that the Department of Justice prioritize the interests of farmers and consumers over the pesticide industry and reject this disastrous merger.”

Jim Goodman, board president of the National Family Farm Coalition and an organic dairy and beef farmer, said the merger means that three seed companies will control the majority of seed germplasm and seed markets in the U.S. as well as a significant portion of those markets throughout the industrialized world.

“The DOJ may as well stop wasting time on merger reviews and be up-front about the fact that they have absolutely no problem with corporate mergers and market consolidation further undermining the ability of farmers to access non-genetically engineered seed in a competitive marketplace,” he said.

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