Bayer sues Russian enforcer over Monsanto deal conditions. Vitaly Dianov comments for Global Competition Review
Bayer has sued Russia’s Federal Antimonopoly Service for ordering the company to share its intellectual property with Russia’s agricultural sector as a condition for clearance of Bayer/Monsanto.
Russia’s antitrust enforcer cleared Bayer’s €56 billion takeover of Monsanto in November, conditioning its clearance on the merged company granting its rivals non-discriminatory access to its data and digital farming platforms. The agency said at the time that the move would help smaller local competitors avoid foreclosure.
Yesterday, Federal Antimonopoly Service head Igor Artemiev said Bayer threatened to abandon the deal in Russia if it was forced to share its patented technology, according to the Financial Times.
A Bayer spokesperson said the “parties are in dialogue but the agreement has not been reached yet.”
The spokesperson said Bayer has brought the case “to safeguard its juridical rights”, and said it does not prevent the two sides from negotiating a mutually beneficial agreement with Russia’s agricultural industry.
“Bayer is confident of being able to successfully complete the acquisition of Monsanto in compliance with applicable Russian competition laws, [and] is fully committed to Russia and Russian farmers, patients and consumers, and will continue its operations in Russia,” the spokesperson said.
Goltsblat BLP partner Vitaly Dianov in Moscow said it is “not a surprise when Russian state courts [turn] a blind eye on mistakes of authorities.”
“[The enforcer’s] decision to apply remedies – and the scope of these remedies – is unprecedented” and highly interventionist, Dianov said. He said the appeal will give Bayer more time to negotiate with the enforcer, or to reduce the negative consequences of an exit from the Russian market.
Dianov said he presumes it will be “extremely difficult” for Bayer to win its case in Russia’s courts.
Evgeny Khokhlov, a partner at Antitrust Advisory in Moscow said it is not unusual for companies to appeal against Russian clearance decisions – but said it is the first time he has heard of a company challenging pre-closure conditions.
“This may be because [the Federal Antimonopoly Service] is generally less stringent in its merger enforcement as compared to… antitrust enforcement,” Khokhlov said.
“In most cases, FAS issues post-closing remedies, and pre-closing conditions are issued only in exceptional cases where there are very significant competition concerns – like [the enforcer] claims is the case with Bayer/Monsanto,” he added.
The Federal Antimonopoly Service and Monsanto did not respond to requests for comment.
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