Greenhouse vegetables competition
Looking at the whole Bayer-Monsanto deal, vegetable seeds only make up a small part. Bayer's and Monsanto's agricultural entities with row crops and crop protection products are a much bigger deal. High tech greenhouse vegetable seeds account for just a few percent of the entire turnover of both companies. Yet, greenhouse horticulture is an important growth market.
Over the last few decades many consolidations in the seed breeding industry took place. Breeding companies were taken over by multinationals and investment companies to secure the costly investments the breeding industry is asking for.
Monsanto acquired Dutch breeding company De Ruiter Seeds in 2008. In 2002, Nunhems became part of Bayer CropScience, a subsidiary of Bayer AG. Seminis was established in 1994 after the acquisition of the Agrow Seed Company, Bruinsma and Genecorp. Bruinsma was a leading Dutch breeder and the first company to introduce a hybrid tomato in Europe. In 2012, Monsanto announced that its Seminis brand would focus solely on open field and unheated protected vegetable crops and that the De Ruiter brand would become their brand for protected crops in heated structures, i.e. medium and high tech greenhouses.
Investigating the three biggest greenhouse crops (cucumber, bell pepper and tomatoes) both Bayer and Monsanto are very active in tomato breeding. The portfolio of De Ruiter has given Monsanto a leading position in regards to high yielding tomato varieties that account for a large market share in the global high tech greenhouse vegetable market.
Bayer is a bigger player with its high tech cucumber varieties, with Monsanto making a comeback currently. In greenhouse peppers, Bayer currently isn't active at all, even though they are active in processing peppers. Monsanto again has much important material available via its breeding activities at De Ruiter.
Both De Ruiter Seeds and Nunhems are investing fiercely in the greenhouse vegetable breeding business. The construction of 'GreenEx' currently is in full swing. This brand new R&D facilities will consist 2.5 hectares of greenhouses and 17,000 square metres of support facilities. Last year De Ruiter Seeds built a complete new Tomato Experience Centre of 8,000m2 in size.
Building at the Tomato Experience Centre
Bayer and Monsanto announced in September 2016 that they signed a definitive merger agreement under which Bayer will acquire Monsanto for USD 128 per share in an all-cash transaction. Bayer received already many approvals last year for the proposed acquisition of Monsanto. “We took major steps toward the proposed acquisition of Monsanto. Only recently, the Brazilian antitrust authorities gave the green light. That is an important milestone on the road to closing this transaction. After all, Brazil is one of the world’s most important agricultural markets,” Baumann said. Overall, more than half of the around 30 authorities worldwide have now approved the acquisition. Although Bayer is continuing to cooperate closely with the institutions involved, it is becoming evident that the examination procedures will require more time. “Our goal now is to be able to close the transaction in the second quarter of 2018,” Baumann explained. “This does not affect our expectation of a successful conclusion to the regulatory review, nor our conviction that this is the right step."
The European Commission is set to announce whether it approves the Bayer and Monsanto merger in the first part of this year. The date has been postponed twice and suspended four other times so far.