Food & Agriculture Quarterly March 2018 | Page 10

MARCH 2018 FOOD & AGRICULTURE QUARTERLY PAGE 10 up ’ s competitive effects in grain origination and oilseeds processing markets .
Merely because the combination may possess market power in a given area does not mean the entire transaction will be doomed . Often , parties will agree with the antitrust enforcement agencies to restructure a deal in order to satisfy the regulators ’ concerns . To illustrate , U . S . antitrust enforcers addressed concerns relating to the Dow-DuPont merger in a Final Judgment , entered Oct . 19 , 2017 , that required partial divestitures of DuPont ’ s herbicides and insecticides businesses , as well as Dow ’ s acid copolymers and ionomers business . Similarly , the Federal Trade Commission ( FTC ) determined that the ChemChina-Syngenta merger , as initially proposed , would harm competition in the U . S . markets for three pesticides . ChemChina ’ s subsidiary supplied the generic alternative that predominantly competed with Syngenta ’ s branded version of these three products . Thus , the FTC required divestitures of rights and assets of ChemChina ’ s subsidiary to these products in order for the parties to complete the merger . different markets . The DOJ concluded that in those nine markets , Cargill would gain the power to artificially depress prices paid to crop farmers for grain and oilseeds . As a remedy , the DOJ , Cargill and Continental agreed to divestitures and various throughput agreements mandating competitors ’ access to grain distribution and storage infrastructure .
An ADM-Bunge merger would certainly be significant for farmers , biotechnology companies and other firms involved in the agricultural commodity supply chain .
Devan Flahive is an associate licensed only in West Virginia and concentrates her practice in oil and gas , antitrust and litigation . She can be reached at dflahive @ porterwright . com or 614.227.1989 .
In light of market concentration in grain trading and processing , U . S . antitrust authorities will likely scrutinize a proposed ADM-Bunge merger to evaluate both synergies and economic impacts , such as the resulting firm ’ s pricing power . The U . S . Department of Justice ( DOJ ) has in the past investigated mergers between grain traders . In 2000 , the DOJ filed a civil action relating to the proposed merger between grain traders Cargill , Inc . and Continental Grain Company , alleging that Cargill ’ s acquisition of Continental would substantially lessen competition for grain purchasing services in nine
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