Monsanto’s sunflower seed business expansion investigated by EU

Brussels, 21 June 2010.  The European Commission has opened an in-depth investigation under the EU Merger Regulation into the proposed acquisition of the global sunflower seed business of US company Monsanto by Syngenta of Switzerland. The Commission’s initial market investigation indicated potential competition concerns with respect to the breeding and commercialisation of sunflower seeds and sunflower seed treatment products in Europe. The Commission now has 90 working days to take a final decision. The decision to open an in-depth inquiry does not prejudge the final result of the investigation.

Commission Vice President and Competition Commissioner Joaquin Almunia said: “The sunflower seed industry has undergone important consolidation over the past years and the Commission needs to ensure that effective competition is preserved, to maintain innovation and prevent that input prices for farmers rise.”

The Commission was notified on 28 April of the proposed acquisition of the global sunflower seed business of Monsanto by Syngenta, which is active in the development, production and commercialisation of seeds and products designed to improve crop performance. It is one of the leading sunflower seed players in the EEA. The company was created by the spin-off and merger of the crop protection business of Novartis and AstraZeneca and the seed business of Novartis in 2000 (IP/00/844)

The transaction under review did not originally qualify for review under the EU Merger Regulation as it does not meet the turnover thresholds[1]. Instead it was notified to the Spanish and Hungarian competition authorities for approval. The Spanish competition authority, however, requested that the review be transferred to the Commission and the Hungarian competition authority joined the request.

The proposed transaction would combine two leading sunflower seed suppliers active in Europe. Both are strong in the breeding of new sunflower varieties and in the commercialisation of sunflower seeds. The removal of an important competitor may have a negative impact on the level of innovation, leading to a reduction of choice for customers and to an increase in prices for sunflower seeds. In addition, foreclosure concerns were raised with regards to sunflower seed treatment products. Consequently, the acquisition raises serious doubts as to its compatibility with the EU Merger Regulation regarding the market for the supply of sunflower varieties (resulting from breeding activities), the market for commercialization of sunflower seeds and the market for sunflower seed treatment products.

The Commission now has 90 working days, until 26 October, to take a final decision on whether the concentration would significantly impede effective competition within the EEA or a substantial part of it.

More information on the case will be available at:

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_5675

Citation: Press Release of the European Commission IP/10/770


[1] When assessing whether a merger must be notified to the Commission the companies look at the turnover of the acquirer and of the acquired business. In this case, the sunflower seed business of Monsanto did not reach the EU turnover threshold

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