Monsanto-Bayer: The Year of Merging Dangerously

(Image: Lauren Walker / Truthout)(Image: Lauren Walker / Truthout)

The Big Ag tech giants Monsanto — maker of Agent Orange, genetically modified seeds and weed-whacking chemicals — and Bayer — famed for manufacturing poison gas for Nazi concentration camp use, heroin, baby aspirin and systemic pesticides — are merging. Food security advocates, consumers and non-zombies worldwide are deeply concerned.

CNN Money declared the Monsanto-Bayer merger “the year’s biggest takeover.” Symbolically, it’s the merger of the century. At $66 billion, it’s also the biggest cash transaction on record.

Vermont Sen. Bernie Sanders describes the mega-deal as “a threat to all Americans.”

“These mergers boost the profits of huge corporations and leave Americans paying even higher prices,” he said.

If things unfold as planned, the new company (MonBayer? BaySanto? Or should they just call themselves Poisonous?) will generate approximately 50 percent of its revenue from selling “medicine” and the other half from agriculture. How convenient. They can make us sick with their poisonous, genetically modified faux food, and then treat us with their treadmill of drugs.

The consolidation will create supply-chain dominance, aka vertical integration, in a $100 billion global market.

Bayer and Monsanto may as well fuse. Right now, Monsanto’s herbicide-resistant GM crops withstand Roundup and/or dicamba, not Bayer herbicides. The merged giant would start engineering GM crops resistant to Bayer herbicides. And besides, Bayer’s mischief is mistaken for Monsanto’s all the time. For example, people often credit Monsanto for colony collapse disorder and killing bees. And while GMO seeds and herbicides are definitely not improving the environment, Bayer’s systemic pesticides that coat those GMO seeds are definitely at the heart of the collapse of honeybee colonies around the planet. In fact, these chemicals are also harming worms, soil, other pollinators, our waterways, aquatic life and humans.

But, everyone loves to hate Monsanto.

“The Monsanto brand has many negative associations,” says David King, an associate professor at Iowa State University where he teaches undergraduate strategy and assesses the performance of mergers and acquisitions, technology innovation and defense procurement.

He thinks the Bayer-Monsanto merger is a great brand strategy for Monsanto. Monsanto’s recent courtship history — it approached Syngenta last year with an offer — indicates that the company agrees. King suspects that eventually, the Monsanto brand name will be erased as a way to reposition the consolidated firm.

Why do you think Blackwater changed its name to XE, and then Academi?

King just returned from a conference in Berlin where he talked about the merger. He says the folks he spoke to in Europe feel it’s a travesty that Bayer would “tarnish its good name” by acquiring the company behind Roundup and genetically modified crops.

But critics dismiss this sentiment. After all, Bayer is viewed as “Europe’s Monsanto.”

“Bayer [does] significantly better public-relations work than Monsanto, but that’s it,” contends Antonius Michelmann, CEO of the Coalition against BAYER-Dangers. “Both, Monsanto and Bayer are poisoning and immediately endangering animals, plants and human life. Both care just about profits and nothing else.”

Bayer already does business with Monsanto. Joint projects include a seed treatment combination: Bayer’s Poncho/Votivo seed-applied insecticide is combined with Monsanto’s Acceleron seed treatment for nematodes.

In 2011, Monsanto and Bayer joined forces to sell soybean GMO seeds coated with a systemic pesticide. In the United States, there are 90 million acres of corn sprouted from GMO seed and treated with a systemic pesticide; now Monsanto and Bayer will have all the pesticides they need in-house.

Isn’t this all tarnish enough?

Gone With the Weeds

Why are the companies merging now? Well, that depends on whom you ask.

According to the two Ag giants, the narrative goes something like this: It’s estimated that by 2050 there will be an additional 3 billion people on the planet. Ergo, the merger “is needed to meet a rising food demand.”

Enter Bayer and Monsanto to the rescue!

“What we do is good for consumers. We help to produce sufficient, safe, healthy and affordable food,” said Werner Baumann, CEO of Bayer AG, during a recent press conference. He added that this is also good for their growers because they “have better choices to increase yields in a sustainable way…. Together, we want to make and shape the future of farming.”

It’s amazing, the abyss that can exist between rhetoric and reality. Of course, the “we-need–to-feed-the-world” propaganda has been disproved.

“These two companies are tone deaf to public health and environmental protection. Between them they’re responsible for introducing devastating chemicals,” says Jay Feldman, executive director of Beyond Pesticides. “The question asking if we can actually feed the world without toxic chemicals has long been answered. Despite all our modern ingenuity, we have the same degree of crop loss today that we had before the pesticide revolution.”

Meanwhile, we already produce 1.5 times more than enough food to feed every person on the planet.

“Unfortunately, over a billion of the world’s people are too poor to buy this food — so they go hungry. Corporate mergers aren’t going to change that,” write authors Ahna Kruzic and Eric Holt-Giménez of Food First in a paper called “Monsanto Merger Blues.”

So what else could be behind the merger?

Ask analysts, and they’ll tell you that the entire Ag sector is depressed right now. Farmers are spending less on seeds, fertilizers, and pesticides. Monsanto alone is $9 billion in debt. Some say that the company isn’t in a position to invest money to develop more products and keep up with competitors.

A science policy insider who asked not to be cited by name says he doesn’t buy the “ag sector is depressed” argument. Instead, it’s about exploiting synergies between Monsanto’s seeds and Bayer’s pesticides.

In regards to the debt, he says it’s normal for companies to issue bonds (debt), and it’s not necessarily a sign that they’re in financial trouble. “Monsanto wants to reinforce their go-to argument, which is the need to continue to innovate, which is persuasive with the mainstream even if it’s not for critics.”

As the old saying goes, if you can’t beat ’em, join ’em.

A Year of Merging Dangerously

In 2014, worldwide merger and acquisition activity exceeded $3.1 trillion, writes King, who coedited a recent book on the subject.

At the beginning of 2016, Dow Chemical and DuPont joined forces in a $130 billion merger, and earlier this year Syngenta agreed to a $43 billion sale to China National Chemical Corporation.

Writes Vox‘s Brad Plumer, “mergers can help slow down the bleeding and boost market share and growth and still allow them to spend billions developing new products.” But is this just justification?

Over the years, Monsanto, Syngenta, Bayer, DuPont, Dow and BASF have respectfully gobbled up about 75 percent of small to medium-size enterprises. Many of these acquisitions involved straight seed companies that were not involved in biotech research. Today, what food advocates referred to as the Big Six has shrunk to the Big Four: Bayer-Monsanto; Dow-Dupont; BASF; and Syngenta-ChemChina.

This buyout is likely to create a grisly future. “Seed prices could rise for farmers; consumers could see more genetically engineered foods on supermarket shelves, and our global agricultural system could end up depending on just a few companies to meet a high percentage of the world’s agricultural needs,” Leah Douglas, a policy analyst for New America, wrote in a CNN op-ed.

For those who argue the Bayer-Monsanto merger will decrease market competition because of overlap, the corporate heads say, “Pshaw!” Monsanto focuses on seeds and biology, Bayer on chemicals. Au contraire, the union allows them to combine their “complementary strengths.”

What’s Obstructing the Merger?

According to Maurice Stucke of the Konkurrenz Group, and formerly with the Justice Department, merger reviews of this complexity can take six to nine months. Therefore, the deal wouldn’t close until 2017 and would fall into the lap of the new administration. Fortunately, there are several hurdles still to navigate before this super-company becomes a reality.

  1. Shareholders in both companies must still approve the deal. Bayer holds the right to pull out if the integration is seemingly difficult or if they cannot achieve expected synergies. If Bayer does choose to break up, it will be issuing a $2 billion parting gift to Monsanto.
  2. The merger still has to be confirmed by the European Commission. Foreign antitrust approval must also be granted. This will prove interesting since Europe is not a fan of GMO crops; many of Monsanto’s products are, in fact, banned in Europe.
  3. In the United States, two antitrust agencies (the Justice Department and the Federal Trade Commission) need to collaborate on their analysis of the agricultural biotechnology and seed industry to ensure that the multiple transactions under consideration do not substantially lessen competition.

According to the consumer watchdog group SumOfUs, the Bayer-Monsanto merger violates antitrust laws. The Konkurrenz Group, an antitrust legal firm, has said, “The proposed merger would violate a court order that was part of a US Department of Justice consent decree and the primary US antitrust merger statute, the Clayton Act.”

Bayer is committed to selling $1.6 billion assets to gain antitrust approval. For instance, Bayer and Monsanto control 70 percent of all cotton acreage in the US, which is already genetically modified by Monsanto and treated with systemic poisons by Bayer. So the new company would be required to sell one of its existing cottonseed brands. Also, Bayer’s Liberty Link competes with Monsanto’s Roundup, so the firms’ leaders may just want to pour the mixtures together and call it a day.

Who will keep these companies accountable?

On October 15-16, a panel of six internationally renowned judges will hear testimony from 30 witnesses covering five continents where there are reports of injury by Monsanto’s products. This grassroots-led international citizens’ tribunal and People’s Assembly will culminate in November with the release of advisory opinions prepared by the judges. The tribunal’s work, which includes making the case for corporations to be prosecuted for ecocide, is all the more relevant because of the International Criminal Court’s (ICC) announced plan to “prioritize crimes that result in the ‘destruction of the environment,’ ‘exploitation of natural resources’ and the ‘illegal dispossession’ of land,” according to a report in The Guardian UK.

Whatever decision is reached, it may only be symbolic. No matter what happens at this tribunal, we don’t know what accountability will look like going forward. We’re living in Looney Tune times. While there has been buzz about transparency in recent years, lies have become “the new truth” — to quote comedian and HBO Real Time host Bill Maher.

Certainly countries and corporations are getting away with murder, these days. For revolutionaries committed to a world without toxic chemicals or miles of monocultures, the proposed merger of Monsanto and Bayer means two of our rivals will now be housed under one roof; the deplorable actions that place profit over people and planet remain the same.

Update: Bayer has finalized a $57 billion bridge loan to support its acquisition of Monsanto. According to Bloomberg, 27 lenders have joined the deal, including European and Japanese banks.