Jun 21: The Competition Commission of India (CCI) has directed Bayer to divest Monsanto’s 26% stake in Maharasthra Hybrid Seed Company (Mahyco) to an independent entity following the acquisition of Monsanto by Bayer’s parent company Bayer Aktiengesellschaft , Germany.
CCI noted that acquisition is likely to ahve an appreciable effect on competition in some markets and hence directed Bayer to divest Monsanto stake in Mahyco. The merger was approved under Section 31 (7) of the Competition Act, 2002.
Monsanto is a global supplier of agricultural products such as seeds, biotechnology traits and herbicides whie Bayer is a life sciences company having three main divisions-pharmaceuticals, consumer health and crop sciences.
The divestment of Monsanto stake will have impact on the licensing of Glufosinate ammonium ( a non-selective herbicide), crop traits of cotton and corns and hybrid seeds of vegetables. The GM traits and non-GM traits currently commercialised in India or to be introduced in India in future will have to be done on a fair, reasonable and non-discriminatory terms.
The Combined Entity would follow a policy of non-exclusive licensing of non-selective herbicides and / or their active ingredient(s) in case of launch of new GM / non-GM traits in India that restrict agricultural producers including farmers to use specific non-selective herbicide(s) being supplied only by the parties, on a fair, reasonable and non-discriminatory basis;
Combined entity would allow Indian users / potential licensees to access the following on FRAND Terms: (a) existing Indian agro-climatic data owned and used by the Combined Entity for its digital applications commercialized in India; (b) commercialized digital farming platform(s) of the Combined Entity for supplying/selling agricultural inputs to agricultural producers in India; and (c) digital farming applications of the Combined Entity, commercialized in India, on subscription basis. This remedy shall operate for a period of 7 years from the commencement of commercialization of digital farming product(s) or digital farming platform(s), subject to a total period of 10 years from the closing of the combination.
Combined Entity would also grant access to Indian agro-climatic data, free of charge to Government of India and its institution(s), to be used exclusively for creating a public good in India.
Combined Entity is barred from offering its clients, farmers, distribution channels and/or its commercial partners, two or more products as bundle which may potentially have the effect of exclusion of any competitor.
Combined Entity is further barred from imposing, directly or indirectly, commercial dealings capable of causing exclusivity in the sales channel for supply of agricultural products.
The Commission further ensured in its order, that in case the Combined Entity offers better commercial terms to a new licensee for any of the above licenses, then it would be bound to offer, within 60 days, such similar terms to all existing licensees.