The Australian Competition and Consumer Commission will not oppose the proposed merger between Bayer AG and Aventis Crop Science, ACCC Chairman, Professor Allan Fels, said today.
Bayer and Aventis are both involved in the provision of crop protection products or ‘agrochemicals’ that increase the quantity, quality and sustainability of crop protection for farmers and horticulturalists. Aventis comprises of four business segments: Crop Protection; Environmental Science; Seed Business and the BioScience Business. Bayer, who has a small presence in crop protection in Australia, is also comprised of four business segments: Crop Protection; Healthcare; Polymers and Chemicals.
The ACCC conducted extensive market inquiries into this proposed acquisition, consulting with competitors, distributors and industry bodies.
The combined market share of the merged entity for the crop protection market will be of the order of 20 per cent, and therefore not cross the ACCC's concentration threshold for the exercise of unilateral market power. The ACCC found that the crop protection market is extremely dynamic, characterised by low barriers to entry and intense competition with a high level of substitutability. Almost all active ingredients are imported into Australia, due to a lack of facilities to synthesise active chemicals domestically.
On this basis, the ACCC considers that the acquisition is unlikely to result in a substantial lessening of competition.