Canola Seed Consolidation Small Part of Big Deal: Monsanto, Bayer Execs

It’s hard to believe regulators would allow one company to own 95 percent of the canola traits on the market, but executives from Bayer and Monsanto are not offering any hints on whether they expect to be forced to divest canola seed assets as part of their proposed marriage.

Both Robb Fraley, chief technology officer with Monsanto, and David Hollinrake, vice-president of marketing for Bayer CropScience, were in Fargo, North Dakota, for the Agriculture Bioscience International Conference (ABIC) on Wednesday.

While consolidation, especially in canola seed, is a big concern for Canadian farmers, both Hollinrake and Fraley implied it’s a small part of the overall deal.

“There are clearly a couple of areas that I think are going to go through the regulatory review process, and those will be the areas where if there’s fixes that need to be made or decisions that need to be made, it’s still a very small part of what drives the business combination,” said Fraley, who testified to a US Senate committee on consolidation in the ag industry on Tuesday (watch it here).

“At a high level, the vast majority of Monsanto’s capabilities and expertise is in seeds, traits and data science, and the vast majority of the Bayer portfolio is chemistry,” he noted.

Acknowledging Bayer’s success with its Liberty herbicide-tolerant canola trait in Canada, Hollinrake echoed Fraley’s comments about working through the details with regulators.

Does Bayer expect to have to sell some canola business to gain government approval?

“It’s too early to tell, but we’ll work through the details as necessary,” said Hollinrake.

While the number of companies developing new products would drop by one, both said they see farmers benefiting from the deal between their companies.

“I think it’s pretty clear for agriculture to reach what it needs to do, to achieve the kind of innovations we need to make, we need to scale up, and that’s key. And I think by doing that we better serve farmers,” said Fraley.

Check out the podcast above for more from ABIC 2016 in Fargo, including Fraley and Hollinrake’s responses to questions about consolidation concerns.

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