Tom Lang in Law360: Bayer-Monsanto Deal Would Be Tough Sell For Regulators

05/24/2016

The already-heightened sensitivity of antitrust regulators to large corporate tie-ups would pose a major hurdle to German pharmaceutical and chemical giant Bayer's potential acquisition of U.S. agrochemical company Monsanto, with the quickly consolidating agrochemical space making the industry's latest megadeal an even tougher sale, experts say.

Bayer AG confirmed Thursday that the companies' executives had met to discuss a potential deal, after Monsanto Co. revealed in a separate statement that it was looking over an unsolicited bid from the German company. Neither disclosed the terms of the proposal, but media reports suggest the price tag sits at roughly $40 billion...

The DOJ is currently reviewing the $68.8 billion transaction, after requesting additional information on the deal in March. With two major industry consolidations on the table, the DOJ will have to consider how the deals, together and individually, could alter the market, explained Haynes and Boone LLP antitrust partner Thomas Lang.

"The government sort of has to do a double analysis. It has to analyze both transactions and determine if allowing one versus the other, versus allowing both, would do [harm] to market concentration in those particular markets," he said.

Excerpted from Law360. To read the full article, please click here (subscription required).

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