German chemical giant Bayer today announced an agreement to acquire US seed and biotech firm Monsanto, creating a “global leader in agriculture”, according to Liam Condon, member of Bayer’s board of management and CEO of Bayer CropScience.
“This agreement is an important step in addressing one of the greatest challenges of our time,” he said. “How do we feed a world whose population is expected to grow by more than 3bn by 2050 in an environmentally sustainable way?”
Condon highlighted the progress made by the agriculture sector over the past 100 years, pointing to the use of better seeds, crop protection agents, fertilisers and farming technologies to enable farmers to feed significantly more people.
“Unfortunately,” he added, “that pace is simply not going to be good enough for our future needs. Facing a rapidly growing population, increased climate variability and changing dietary habits, not to mention finite resources and limited farmable land, we still need to find a way to increase the current level of food production by 60 per cent, but also need to do this in an environmentally sustainable way. This represents an immense and complex challenge for our industry.”
Condon said that both companies saw the need for a new approach, integrating one of the major seed portfolios with an innovative crop protection portfolio, together with an advanced digital farming platform.
“This is exactly what we are doing by combining the two companies and creating an organisation able to provide the skills, resources, technology and dedication necessary to help solve this challenge,” he said.
CEO of Monsanto Hugh Grant said that the principal aims of the merger were to increase yields, optimise inputs, improve sustainability and increase return on investment for growers.
The combined company would, he said, be able to “bring innovation to market more quickly, more efficiently and in a more meaningful way”.
Antitrust legal experts have raised concerns regarding the acquisition, arguing that it would reduce competition.
The deal would eliminate direct competition between two of the biggest players in the farm supply and seed sector, a report from German law firm Konkurrenz stated, affecting seed development, herbicide markets and research and development. The result, it warned, would be less choice and higher food prices for consumers.
However, Bayer CEO Werner Baumann revealed his confidence that all regulatory issues would be addressed for the deal to be concluded by the end of 2017.