Bayer's US$66 billion acquisition of Monsanto, creating the world's biggest supplier of seeds and agri-chemicals to farmers, will be closely watched by New Zealand's rural sector as the latest in a series of deals that has shrunk the number of competitors in the market.
Bayer and Monsanto are two of the big seven companies selling agricultural chemicals in New Zealand. Of the other five, Dow Chemical is in the process of a global merger with DuPont and Swiss seed giant Syngenta is close to being acquired by China National Chemical Corp, which already owns Adama. Of the others, ASX-listed Nufarm had a distribution agreement with Monsanto for its Roundup glyphosphate products up until 2013, while Bayer rival BASF reportedly held inconclusive talks with Monsanto earlier this year
Bayer chief executive Werner Baumann has indicated the companies would need to file for clearance in about 30 jurisdictions for the deal and get antitrust approval in the US, Canada, Brazil and the EU, the Financial Times reports. The deal has stoked concern among US farmer groups that they may face price increases for agricultural products.
Federated Farmers arable farming chair Guy Wigley called it "a significant development for New Zealand farming."
"It's a very finely tuned marketplace and farmers are highly sensitive to pricing," he said. "The costs and benefits of using all their products are keenly understood."