The Senate Judiciary Committee scheduled a hearing for Sept. 20 to explore concerns about what a number of large mergers and acquisitions by giant agriculture seed and chemical companies will mean for farmers and the future of the industry, Sen. Charles Grassley, R-Iowa,announced during a news conference with agriculture journalists Tuesday.
Members of Congress returned to Washington, D.C., this week to begin what is expected to be a five-week session aimed at keeping the federal government funded past Oct. 1 when the current continuing budget resolution expires.
Grassley told reporters it is unlikely anything of significance will take place on the agriculture front during the session, pointing to the Sept. 20 hearing as the biggest thing going on Capitol Hill this fall.
In August, Grassley wrote a letter to the U.S. Department of Justice and the Federal Trade Commission, urging the agencies to work closely with the USDA to monitor what major mergers and acquisitions in the seed and chemical industries will mean to U.S. farmers at a time when the farm economy is on the ropes.
Grassley, an Iowa Republican who chairs the Senate Judiciary Committee, was specifically pointing to concerns about the merger of Dow Chemical Company and DuPont Company as well as the potential acquisition of Syngenta AG by the China National Chemical Corp., known as ChemChina.
The Dow-DuPont merger, which has already been approved by shareholders of both companies, remains under review by the U.S. Department of Justice, while the ChemChina acquisition of Syngenta AG is under review by the Federal Trade Commission.
In addition, DTN Crops Technology Editor Pam Smith reported Tuesday, http://bit.ly/…, Bayer AG and Monsanto Co. confirmed they are in advanced negotiations for Bayer to acquire Monsanto. In July, Monsanto rejected a $125-per-share offer from Bayer. Combined, Monsanto and Bayer would account for about $67 billion in annual sales and create the world’s largest seed and crop-chemical company.
In the letter last month, Grassley expressed concerns the mergers and acquisitions could “substantially lessen competition and aggravate an already concentrated industry.”
Grassley said Tuesday, “Anti-trust laws have been on the books for 120 years. Most people feel they are written and haven’t changed much. It really amounts to the enforcement of them. We in Congress want to know there is a good-faith effort to protect consumers.”
On Feb. 3, 2016, Syngenta announced ChemChina had offered to acquire 100% of the outstanding share capital of Syngenta at a price of $465 U.S. per ordinary share plus a special dividend of 5 Swiss francs to be paid conditional upon, and prior to, closing. The intended offer values Syngenta’s total outstanding share capital at around $43 billion.
Syngenta, based in Switzerland, generates about one-quarter of its sales in North America, where it is a top pesticide seller and supplies an estimated 10% of U.S. soybean seeds and 6% of corn.
Besides a review by the Federal Trade Commission, the Syngenta purchase must be cleared by the Committee on Foreign Investment in the United States, a committee represented by several federal agencies that reviews national security concerns created by such mergers.
Shareholders from Dow and DuPont voted to approve the merger in July, creating DowDuPont. The merger creates one of the largest biotechnology, seed and agrichemical companies in the world with an array of brand names for seed, biotech traits, insecticides, herbicides and fungicides.
The $130 billion merger is expected to generate about $3 billion in cost savings as each company announced facility closures and layoffs earlier this summer.