News - September 22, 2016

‘The merger won’t affect the number of varieties’

The chemical company Bayer wants to take over the biotechnological company Monsanto for 59 billion euros. If the merger goes ahead, Bayer will hold more than 30 percent of the global market for agricultural seeds and pesticides in its hands. This would make Bayer-Monsanto a little bigger than the Chinese state-held company ChemChina, which took over the Swiss company Syngenta earlier this year. Richard Visser, professor of Plant Breeding, does not think the merger will result in fewer plant varieties on the market.

Is this merger a bad business?

‘From an economic point of view the merger is very interesting because the companies are very complementary. Bayer is big in crop protection and in Europe; Monsanto in breeding key crops and the pesticide Roundup. For the breeding of vegetable seeds the merger means that they have a joint market share of about 25 percent. A big player. I don’t expect there to be fewer varieties on the market in the short term because of the merger. Upscaling has been going on for years and the number of new varieties has not gone down so far.’

The merger needs the blessing of the authorities in as many as 30 countries. How likely do you think they are to consider the new combination too dominant?

‘Difficult question, I’m not an authority on industrial competition. People will take a good hard look at this megamerger both in Europe and the US. If this new merger holds 25 percent of the world trade in vegetable seeds in its hands, its dominance would seem limited, as the other 75 percent is not in its hands.’

What does it mean for Dutch plant-breeding research?

‘Bayer and Monsanto have both taken over Dutch breeding companies so I could imagine people in the Netherlands will start concentrating and cut down on locations. What you also often see is that managers first want to get a good internal overview of the research in the merged company and what it might mean for their innovation. A consequence of this is that for a few years the companies participate less in public-private research projects, including collaboration with WUR.’