In its own statement, Leverkusen-based Bayer said it "believes that the proposed combination will be highly beneficial for farmers and consumers." The firm "will continue to work closely and constructively with the European Commission" and still aims to receive approval for the deal by the end of the year, it added.
After a months-long pursuit in which it raised its offer price several times, Bayer won over Monsanto's management in September for the deal, which would create the world's largest integrated pesticides and seeds company. If the tie-up goes ahead, the new company would have some 140,000 employees around the world with combined annual revenues from agriculture alone of about 23 billion euros.
But the deal has drawn criticism from environmental groups because of Monsanto's long history of promoting genetically modified crops. "There's not much to investigate. One monster corporation controlling our food is a bad idea for farmers and citizens everywhere," said Nick Flynn of the Avaaz advocacy group.
"Over a million people are hoping Commissioner Vestager comes back with a long-term rejection of Monsanto and Bayer's marriage from hell." The European Commission expressed concern that Bayer produces one of the few alternatives to glyphosate, an herbicide that Monsanto markets under the name Roundup, one of the most widely sold weed-killers in Europe.
It also said that both companies have large market shares in vegetable seeds and in several field crops where their products compete against one another. The European Commission added that Bayer was one of the few competitors to Monsanto in several markets for developing traits in plants, such as tolerance to herbicides.
It said the two companies made commitments to address some of its concerns in July. "However, the commission considered these commitments insufficient to clearly dismiss its serious doubts as to the transaction's compatibility with the EU Merger Regulation," it said in a statement. The commission said it would take a decision on the merger by next January 8.
Bayer's planned takeover is the latest in a wave of consolidation in the competitive agrochemicals sector. China's state-owned ChemChina has completed its $43 billion takeover of Switzerland's Syngenta, while the nearly $150 billion tie-up of US giants Dow Chemical and DuPont is expected to close sometime this month.
Bayer last month lowered its full-year earnings forecast after revenues shrank at its agrichemical and over-the-counter medicines units in the second quarter. Most of the sales decline stemmed from higher-than-expected stocks of insecticides and pesticides left over at the end of the harvest season in Brazil, which required the group to book financial provisions. Shares in the chemicals and pharmaceuticals giant were little moved by news of the extended EU investigation, trading up 2.0 percent at 108.55 euros around 3:30 pm (1330 GMT), compared with a DAX index of blue-chip German stocks that was up 1.1 percent.
Copyright Agence France-Presse, 2017