Will Mega-mergers Change the Agriculture Industry’s DNA?

The recent mergers of numerous chemical and agricultural companies are said to be the biggest farm-business oligopoly in history. An article by Felicity Iredale on Lexology.com reviews the proposed mergers and how they will affect agricultural research as a result.

The announcement of the three mega-deals, all of which are still undergoing reviews by various government agencies, are expected to be finalized by the end of 2017:

  • ChemChina’s (China) $43 billion bid for Syngenta (Switzerland)
  • Bayer’s (Germany) $66 billion bid for Monsanto (U.S.)
  • The DuPont-Dow $60 billion merger of equals (both U.S.)

All three mergers appear as though they will soon be approved by the regulators. The likely outcome of these mergers and whether the combined research and development (“R&D”) efforts will be smaller than the additive sums of the individual enterprises will be reviewed.

ChemChina-Syngenta

Syngenta recently accepted the $43 billion offer from ChemChina, making it the most expensive foreign takeover in Chinese history. This deal requires regulatory approval in Europe, where Syngenta is headquartered, and the United States, where a number of Syngenta assets are based.

ChemChina Chairman, Ren Jianxin, has promoted the merger by saying that it will “increase global crop yield while conserving scarce natural resources,” and adding that the merger would provide growth opportunity in China, “where there is rapid modernisation driven by the need to increase grain productivity and increase food quality”.² Additionally, this merger has also instilled hope into buyers, who are now expected that ChemChina’s ownership of Syngenta will help speed China’s process of evaluating new biotech seeds.

The opinion on the impact on research is divided. Some researchers suggest that it will improve the quality of research while others have said that research may become too specific to the areas ChemChina and Syngenta operate in. There is also concern that because of the lack of competition, research won’t have varying points of views and may lack contention.

Read more at Lexology.com.

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