DOJ took extra care to ensure Bayer-Monsanto divestitures won't fail, official says

19 June 2018 2:59pm

14 June 2018. By Leah Nylen.

Antitrust prosecutors took extra steps to ensure that Bayer-Monsanto’s $9 billion divestiture package — the largest ever required — won’t fail, a senior Justice Department official said.

Deputy Assistant Attorney General Donald Kempf said success of the assets divested by Bayer and Monsanto to complete their $66 billion transaction was a “key concern” for the antitrust division. Last month, the DOJ required Bayer to divest all businesses that currently compete with Monsanto’s, including several of Bayer’s seed businesses and its herbicide business to BASF. Officials took about 18 months to review the transaction.

“We cannot have a divestiture that fails,” Kempf said at a conference in Chicago. “So we did a number of things to make sure that the package being divested could succeed.”

In one instance, the agency required the parties to divest an entire factory, even though only half the products made at that location were part of the divested business, he said. The DOJ also carefully vetted the personnel that Bayer intended to give to BASF as part of the divestitures.

“We were not content to have Bayer say, ‘Here is a list of people we’re giving that can go with this and as you’ll see when you check their resumes, they are all experienced in this field.’ We said, ‘Eh, we don’t want to take a pig in a poke and a chance with what we might get won’t work out. So we want to interview and talk to people not only on the list but also some who are similarly situated who are not on the list,’” Kempf said. “We ended up revising the list pretty significantly to make sure that they divested not only people who fit the job description but the best people that job description could get to ensure viability after the divestiture.”

The DOJ doesn’t intend to engage in long-term oversight, Kempf said later in response to a question, but will closely monitor the divestitures in the short-term.

“We have a lot of short-term oversight for the Bayer-Monsanto transaction to make sure that what was agreed to in fact happens,” he said. “After it happens, however, we disappear from the scene and let the free market forces determine what happens next.”

*Ninth Annual Chicago Forum on International Antitrust Issues. Northwestern University School of Law. Chicago. June 14-15, 2018.

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