Bayer/Monsanto: DOJ Staff Seeks Statements from Industry Participants Detailing Seed Sector Complaints

Published on Dec 20, 2017

DOJ staff reviewing Bayer’s bid for Monsanto are contacting agricultural industry players in search of farmers to testify or give statements about how the seed sector’s lack of competition has harmed their businesses, according to sources familiar with the matter.

The Department staffers told the industry players they would use the information if the DOJ chose to sue to block the $63.5 billion merger, the sources said. The DOJ staffers also said the department’s leadership has not decided whether to sue, or instead clear the deal with conditions.

The farmers’ stories would add a personal twist to a government case that is expected to rely heavily on data and economic theories, the sources said. The latest DOJ request follows the European Commission’s move last week to reportedly issue a formal statement of objections on the deal.

In preparing cases, DOJ staff typically conducts formal interviews of industry participants, and asks for either signed affidavits or statements known as declarations. Sometimes the DOJ has those interviewed testify in court, as well, if the case goes to trial.

However, a DOJ move to collect interviews or other prepared testimony is not necessarily an indication that a deal will end up in litigation. DOJ staffers gathered numerous statements from industry participants before clearing with divestitures and modified licensing agreements Monsanto’s acquisition of cottonseed provider Delta & Pine Land in 2007.

Farmers fear angering Monsanto. The DOJ could face some resistance in gathering testimony for a potential suit to block Bayer/Monsanto. The Department’s request has caused consternation among some farmers and industry players who fear angering Monsanto, the world’s biggest seed company, with any critical public comments, the sources said.

Deal critics have said that farmers and seed dealers already feel beholden to Monsanto and that a sale to Bayer, the world’s No. 1 agrochemical company, would tighten the grip.

In an emailed statement, Bayer said it “remains confident” it will receive the regulatory clearances it needs to buy Monsanto. “We anticipate the combination will offer growers a broad set of solutions to meet their current and future needs, including enhanced solutions in seeds and traits, digital agriculture, and crop protection,” said the statement.

Spokespeople for the DOJ and Monsanto did not immediately respond to requests for comment.