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COMPETITION LAW IN BRAZIL: 2018 OVERVIEW 21

Bayer’s acquisition of Monsanto:
global transaction; horizontal and vertical concerns

In February, CADE’s Tribunal also voted to approve Bayer’s acquisition of
the Monsanto Company, subject to a consent decree .
2
The deal had global ramifications and regulators were also notified in
another 29 jurisdictions. In Brazil, competition concerns focused mainly on the soybean and
cotton markets and further vertical integration in transgenic seed and pesticide production/
development. Commissioner Paulo Burnier delivered the majority opinion defining the
following relevant markets:

Related Relevant Markets

(i.1) soybean biotechnology;
Horizontal (i.2) soybean seeds;
overlapping (i.3) cotton biotechnology;
(i.4) cotton seeds;

Vertical (ii.1) Parties’ soybean biotechnology and soybean seeds;
integrations (ii.2) cotton biotechnology and cotton seeds.

Resulting (iii.1) the power of Parties’ portfolio;
effects (iii.2) Parties’ ability to provide integrated solutions.

In brief, interested third parties noted the risk that Monsanto’s soybean
monopoly would pose and pointed to further vertical integration between Monsanto and
Bayer to develop transgenic products and their respective pesticides. These changes would
allegedly allow the new company to “dictate Brazilian soybean production efficiency
and capacity”.
The transgenic seed production chain is integrated. It begins with biotechnology
innovation; the biotechnology is then acquired by companies like the state-owned research
corporation Embrapa (which owns the germplasms); this results in the transgenic cultivar, which

2
See Merger Review No. 08700.001097/2017-49.