By way of a 14 June 2018 order, the Competition Commission of India (CCI) approved Bayer Aktiengesellschaft's proposed acquisition of Monsanto Company.

Structural remedies

The CCI approved the proposed combination, subject to the parties implementing the following remedies:

  • Bayer had to divest the following businesses to an independent third party:
    • its glufosinate ammonium business;
    • its crop traits for cotton and corn business; and
    • its hybrid vegetable seeds business.
  • Monsanto had to divest its shareholding in Maharashtra Hybrid Seed Company Limited (26%) to an independent third party.

Additional commitments

In addition to the above structural remedies, Bayer was directed to undertake the following commitments for a seven-year period starting from the date on which the proposed combination was closed:

  • The resultant combined entity must now follow a policy of broad-based, non-exclusive licensing for genetically modified (GM) and non-GM traits currently commercialised in India or to be introduced in India on fair, reasonable and non-discriminatory (FRAND) terms.
  • The combined entity must follow a policy of non-exclusive licensing for non-selective herbicides and their active ingredients if a new GM or non-GM trait is launched in India that restricts agricultural producers (including farmers) from using specific non-selective herbicides supplied by the parties on FRAND terms.
  • The combined entity must give Indian users and potential licensees access (on FRAND terms) to:
    • the existing Indian agro-climatic data owned and used by the combined entity for digital applications commercialised in India;
    • the commercialised digital farming platforms used by the combined entity to supply or sell agricultural inputs to agricultural producers in India; and
    • the combined entity's commercialised digital farming applications on a subscription basis. This remedy will apply for seven years from the commencement of the commercialisation of a digital farming product or farming platform, up until 10 years from the closing of the combination.
  • The combined entity must give the government access to Indian agro-climatic data free of charge. This information will be used exclusively for the benefit of the Indian public.
  • The combined entity cannot offer its clients, farmers, distribution channels or commercial partners two or more products as a bundle if this would potentially result in the exclusion of any competitor.
  • The combined entity cannot impose, directly or indirectly, commercial dealings capable of causing exclusivity in the sales channel for the supply of agricultural products.
  • If the combined entity offers better commercial terms to a new licensee for any of the above licences, it must offer similar terms to all existing licensees within 60 days.

In addition to these commitments, Bayer was directed to disclose all contact details on its Indian websites to facilitate the implementation of the CCI's remedies.

For further information on this topic please contact MM Sharma at Vaish Associates by telephone (+91 11 4249 2525) or email ([email protected]). The Vaish Associates website can be accessed at www.vaishlaw.com.

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