European Commission clears Syngenta’s acquisition of Monsanto’s sunflower seed business
On 17 November 2010 the European Commission cleared the acquisition of the sunflower seed business of Monsanto by Syngenta.
Among the concerns of an in-depth investigation of the transaction was whether it would harm innovation in sunflower seeds by combining firms that are both strong in the development of new sunflower varieties. The development of new varieties is undertaken by the breeding and crossing of parental lines, resulting in hybrid seeds with specific desired characteristics. Most seed companies exchange and license parental lines with other breeders in order to accelerate the breeding process. The Commission found that the transaction would give the merged firm the ability and incentive to significantly reduce such exchange and licensing of sunflower varieties, thus raising concerns about reduced innovation as well as foreclosure of competitors in the downstream markets for commercialization of hybrid seeds.
The Commission found that the commitments offered by Syngenta, to divest some of Monsanto’s current and pipeline parental lines along with the right to commercialize and license the resulting hybrids, however, remedied the above concerns, thus clearing the transaction with commitments. [Juha Vesala]