U.S. senator expresses concern about ag tech mergers
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U.S. Senator Charles Grassley (R-IA) (L) and Senator Richard Durbin (D-IL) participate in a news conference about proposed criminal sentencing reform legislation at the U.S. Capitol in Washington, U.S., April 28, 2016. REUTERS/Jonathan Ernst
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By Diane Bartz
WASHINGTON (Reuters) - Two major mergers in agricultural technology and seeds could hurt competition in the industry and make it harder for smaller companies to compete, Senator Charles Grassley, chairman of the Senate Judiciary Committee, wrote in a letter on Wednesday sent to antitrust enforcers.
Grassley, a Republican from Iowa, urged the Federal Trade Commission, which is reviewing the purchase of Syngenta AG by the China National Chemical Corp [CNNCC.UL], and the Justice Department, which is looking at the merger of Dow Chemical Co and DuPont Co, to coordinate on the two reviews.
"It is important that these transactions not be reviewed in isolation," wrote Grassley. "I urge the Department of Justice and the Federal Trade Commission to collaborate, as appropriate, with input from the Department of Agriculture, in their analysis of the agricultural biotechnology and seed industry and the impact of these proposed transactions."
Dow and DuPont said in December that they would combine in an all-stock merger with plans to then break into three separate businesses. In February, China's state-owned ChemChina [CNNCC.UL] made a $43 billion bid for Swiss seeds and pesticides group Syngenta.
The deals by some of farmers' biggest global suppliers concerned Grassley, who represents a largely agricultural state.
"I am concerned that the convergence of these proposed transactions – as well as others currently being discussed – will have an enhanced adverse impact on competition in the industry and raise barriers to entry for smaller companies," he wrote.
"I also am concerned that further concentration in the industry will impact the price and choice of chemicals and seed for farmers, which ultimately will impact choice and costs for consumers. Finally, I am concerned that further consolidation will diminish critical research and development initiatives," added Grassley.
The letter was dated Tuesday and sent to FTC Chairwoman Edith Ramirez and Renata Hesse, the acting head of the Justice Department's Antitrust Division.
(Reporting by Diane Bartz; Editing by David Gregorio)
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