Bloomberg's Rie on Antitrust Issues For Bayer-Monsanto (Audio)

Stocks are under pressure today, with the Dow currently lower by a hundred and twenty point says if he's dropped seven and as that lower by two and a half. This morning, the Dallas Fetti manufacturing was a big miss, and a UK online poll on the EU showed forty seven percent leave remained. The small cap six hundreds down to point and the US ten y yield fell to one point eight three percent after hitting one point eight nine percent, and crew features faded from the fifty dollar level.

Eight out of tennis B sectors are lower, led by losses and staples, energy and the materials. Only Telecom and utilities gained doubt Transports rise three points and as a biotext climb seven, and the vix is higher by thirteen percent. Dell leaders of the downside include Boeing DuPont and Nike, small games for Verizon and Caterpillar. Amazon traded to a new all time intur day high, hitting seven hundred and

twenty four hours to share. Apple traded back below the hundred dollar level, and Great Plains Energy fell six percent after its deal for west Star after the belt tonight, look for earnings from work Day Live on the first Breaking News desk on Bow Maloney. Charlie all right, thank you very much, Bill Maloney, and we are brought to you by Brown University with the new Executive Master in Cybersecurity prepares leaders in law, technology and business to face

tomorrow's greatest threats. The Brown University Executive Master in Cybersecurity Strategy is the best security to hear live breaking news over your Bloomberg type squawk escue you a w K on your terminal. I'm Charlie Pellet. That's a Bloomberg business flash. You're listening to taking stock with pin Box and Kathleen has on Bloomberg Radio. Monsanto may have initially rejected buyers

sixty two billion dollar takeover bid. Bloomberg First Word reporting that Street Insiders says they are ready to raise their bid to a dollar thirty five or excuse me, a hundred hundred thirty five share. Excuse me, got my decimal point in the wrong place. That's where the focus has been a lot on on when it comes to Wall Street in analysts. But our next guest is looking at a very important part of this, and that's the rigorous review by anti trust regulators that buyer will face in

multiple jurisdictions around the world. What does this mean for the deal? Jennifer Jennifer rehe Is. Here's he's senior litigation analysts for Bloomberg Intelligence and she's joining us in our New York studio. Welcome, Jennifer, Thank you so much for having me. So again, let's put all that price stuff, because if they really want to do this, they're going to come to a price, right. The question is that's just one step then have to get past the regulatars.

What's the biggest issue on that those regulators minds? You know, I think the biggest issue is that we're looking at a lot of concentration in what you might want to call, you know, agricultural or chemical areas, so you know, three different deals that are ongoing at the same time that are all global in nature, that deal with various crop protection chemicals and with seeds, and there's a lot of nervousness about the way the regulators are going to view

these deals, given what they've done with Haliburton and Baker Hughes and a few other deals in the past. Um and whether this might be deemed too much concentration. Now here's a quote, and I'd like your thoughts and maybe you can figure out exactly what this would mean for people that are involved in the legal issues of this potential combination. This is coming from Robert Lawrence. He's a Johns Hopkins School of Medicine professors, also the founding director

of the Center for a Livable Future. He says, the fact is we went from having probably thirty to forty varieties of soybeans to now having one variety making up nearly all of US soybean production. So as set aside the business aspect of what this means for farmers, but just in terms of having to only rely on one variety, well, you know the fact that that might have happened, you know, we have to understand why that happened and how that

came about. If that happened due to increased concentration and less competition. It's one thing, but the anti trust laws will focus on increased competion, competition, but a decrease in competition, less innovation, and less choice from mergers. So they'll look at the effect of these deals and whether these deals

may continue to contribute to that. They may not look at, you know, they'll look the way things stand today, but they look at will it for will they further contribute and if in fact it will, is there something can that can be done? Are there concessions or divestitures or let's say, changes the licenses that can be agreed to in order to allow these deals to go forward and

perhaps fix that problem going forward? So is it give us just a sense of do there are the issues pretty much the same among antitrust regulators around the world. If you go from the US to Germany to gosh, you know, Japan, is it different? It is different? You know, there are many many similarities, but there are also differences. And to start with in this industry, what we've seen so far historically is that these regulators will look at the effect on in this area country by country and

not necessarily globally. So, for instance, if the European regulators are looking at how it affects competition European Union wide or country by country within Europe, that's going to be different than the way the U S regulators may look at it, who are focusing on how does it affect the United States UH and China, which might be asking how does this affect China. There are times when the regulators will say, this is a global market, how does

it affect the world the globally? But in this area, at least in the past, historically they have looked at the areas when they've assessed past deals country by country. Well, just to just to sort of underscore your point about this consolidation, we're talking about Dow Chemical and DuPont combining, then c Genta, and then you've got the Chinese state owned company KEM China KIM China, right, So a real

concentration in this particular industry group. Right. But again, the regulators, the first thing they ask is where do these companies compete in terms of products and services? And where do they compete geographically? And that's the starting point and you have to ask that. And when you ask that, and you start to look at these deals, you realize, okay, well, KEM China and cin Ginda don't necessarily overlap in every country in the US, and for every product, they don't

necessarily compete everywhere. And the same thing could be true. Let's say for seeds. You know you have buyer that isn't so big in seeds and bigger and crop protection and and and more complementary perhaps to mind Santo, and you've got to kind of dig into that nitty gritty to understand where the competition issues are going to lie.

I would imagine they're also going to have to learn about the diseases that might affect No, seriously, that might affect some of these crops, because if you're only depending on one variety, then it doesn't matter what if did the business. It will devastate the agricultural community. Absolutely. You know, they dig in hard, these regulators. That's why these things taken here. They look at everything. Yes, or notice, let's go through the steel. Do they make it past just

I think yes, with with some concessions. I'm thank you very much for coming in and spending time with us. Jennifer Rees, senior litigation analysts for Bloomberg Intelligence. Shares of Monsanto they are up about two and a half percent right now, and shares of Buyer down about one percent. You're listening to Taking Stock on Bloomberg Radio. Bloomberg Taking Stock is brought to you by Bank of America Merrilancha's Global Cash management solutions, helping you manage, protect, and invest

your global cash wherever the road to growth leads. That's the power of global connections. Bank of America, North America. Remember F D I C