Bayer’s massive deal to buy Monsanto is something that surprised many people all over the world. Food prices may surge, professionals say, if a newly-proposed agrarian company acquisition is ratified by regulators.
The company that has been at the center of controversies – Monsanto – concerning genetically modified organisms, industrial chemicals, and pesticides – has decided to be acquired by Bayer, an agrochemicals company in Germany, well-known for making drugs like Aspirin and Alka-Seltzer, the corporations announced Sept. 14, 2016.
Monsanto is possibly one of the most dragged companies on the internet, partly because of some huge PR disasters during its hundred-plus year history. For one? It was one of a few corporations which produced a weaponized pesticide used in the Vietnam War, known as Agent Orange – with permanent health consequences.
Starting in the middle 80s, Monsanto started moving more in the manufacturing of seeds. Today, the biggest all-cash deal in history – the $66 billion takeover – will make Bayer the greatest producer of agricultural chemicals and seeds in the whole world.
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A professor at Warwick Business School, John Colley, told BBC:
“Bayer’s purchase of ‘Frankenstein’ crop producer Monsanto can be a horror story for both Bayer and its customers. The farmers will fail to benefit as produce ranges are restructured and attempts are made to raise prices.”
In a phone interview with Mic, a professor at the Olin School of Business at Washington University in St. Louis, Professor Radhakrishnan Gopalan, reverberated the Colley’s worries.
Gopalan said: “[Food] will certainly get more expensive … I am guessing all over because it is not just this merger. Any consolidation isn’t good news for consumers.”
Actually, this one is the agricultural industry’s 2nd major consolidation this week, after 2 Canadian companies, Agrium and Potash Corporation, stated they would also be merging.
DuPont and Dow Chemical are also trying to merge, prompting worries that the entire industry can become less competitive, and make seeds that will be very expensive for farmers: That will affect consumer prices because agriculturalists would have to recompense for the higher cost of purchasing seeds.
Regulators in Europe have already indicated that they will look into Bayer’s Monsanto acquisition for the prospect of anti-trust worries, even though Gopalan claimed the business deal would likely still be approved, since the 2 companies aren’t concentrated in exactly the same geographic regions and markets – a significant factor regulators look at when defining whether a takeover can be monopolistic.
He said: “Given that Bayer isn’t really strong in the U.S. … they have complementary geographic spread.”
Though, Europe, where Bayer is widely headquartered, surely is more restrictive than America, when it comes to GMO foods.
GMOs get a truly bad reputation – mostly because numerous consumers get angry when genetically modified food is not clearly labeled. Still, whether GMOs are really all that bad? That is a quite complicated debate.
Protagonists of GMOs may counter that various studies linking GMOs to certain health ailments have been debunked, and they are also a significant endeavor in the mission to produce more plentiful better foods.
According to a Monsanto spokeswoman, the merger would “raise returns for agronomists” by improving research and allowing for “even more effective innovation”.
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Conclusion:
Bayer’s massive deal to buy Monsanto is definitely a big deal, especially for the quality of the food they will produce and its price. Many onlookers are worrying that the reduced competition can shrivel up modernization, leading to slower improves in produce in crop yields. Other fear that these brand-new agricultural giants might have outsize political power.
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