U.S. lawmakers skeptical of ag chemical, seed merger wave
By Diane Bartz
WASHINGTON, Sept 20 (Reuters) - U.S. lawmakers expressed concern on Tuesday over a wave of mergers among companies that sell farmers their seeds, herbicides and insecticides, worrying that the deals could lead to higher prices and less innovation at a time of dropping farm incomes.
Senator Richard Blumenthal, a Democrat from Connecticut, said the proposed mergers of Dow and DuPont, Bayer and Monsanto and Syngenta and ChemChina had potential consequences which were "troubling, in fact alarming."
Executives at the five companies defended their mergers at a hearing of the U.S. Senate Judiciary Committee but Blumenthal was one of several senators who were unconvinced.
"The stakes are very high here. I am worried about consolidation in this area of our economy and other areas as well," said Blumenthal, pressing executives from Bayer and Monsanto to acknowledge that their herbicides Liberty and Roundup, respectively, were competitors.
"They are competitors, yes," said Bayer President and CEO Jim Blome, who noted that the main ingredient in Monsanto's Roundup was generic. He said this meant merging the two companies would not reduce competition.
The merger spree began in December, when chemical titans DuPont and Dow Chemical Co agreed to an all-stock merger valued at $130 billion at the time, a first step toward breaking up into three separate businesses.
Next was ChemChina's $43 billion takeover of Swiss pesticides and seeds group Syngenta in February. That deal won approval from a U.S. national security panel in August.
In September, two of the three big fertilizer companies, Potash Corp of Saskatchewan Inc and Agrium Inc said they would merge and German drug and crop chemical maker Bayer clinched a $66 billion takeover of U.S. seeds company Monsanto. Continued...