Bayer’s $62-billion all-cash offer to buy Monsanto, which has created a flutter globally, is bound to have a strong resonance in India as well. If and when the deal is sealed, the seed industry and research in the country could feel the impact.

Both multinationals have a significant presence in India. Bayer Crop Science and Monsanto India are also listed on stock exchanges and play an active role in the advocacy of biotech-led agriculture.

Bayer offered to pay $122 a share, valuing Monsanto at $ 62 billion. The price is a 37 per cent premium over the latter’s closing share price of $89.03 on May 9. If Bayer’s moves succeed, it will create a global behemoth, making it one of the top three firms in the agrichemicals and seed markets.

Even if it happens globally, it will take some time for the two entities to complete the merger here as it requires statutory and regulatory clearances. In India, experts feel that it could ultimately lead to an increase in prices of seed and crop-protection products.

“We have no further comments on this issue,” a Monsanto India executive told BusinessLine, when asked about the potential impact here.

A seed industry expert felt that the latest deal will lead to creation of an oligopoly, with three entities (Syngenta-ChemChina, DuPont-Dow and Bayer-Monsanto) controlling two-thirds of the global agri-chemical business and over 60 per cent of the seed market.

“When the resources are concentrated in a few hands, their bargaining power will go up and it will have an adverse impact on the interests of farmers in Third World countries, like ours,” said a top executive at a seed company, requesting anonymity. When two firms with strong research and marketing resources join hands, they will have better bargaining power and this could lead to an increase in seed prices,” he said.

However, Manish Jain of Axis Holdings, which invests in agricultural entities, said that the acquisition would have no immediate impact on the seed business in the country.

Related Topics
comment COMMENT NOW