Competition Commission has directed Bayer to divest various businesses in India, including hybrid seeds of vegetables and Monsanto's 26 per cent stake in Maharashtra Hybrid Seed Company, in order to address anti-competitive issues arising out of the German major's USD 63 billion deal with Monsanto.
Various conditions have been put in place by the fair trade regulator while giving its nod last month for the deal, which was announced in September 2016.
"Based on its investigation, the Commission was of the opinion that the proposed combination is likely to have an appreciable adverse effect on competition in some markets in India but the same could be addressed by way of modifications to the proposed combination," an official release said today.
Apart from selling Monsanto's 26 per cent stake in Maharashtra Hybrid Seed Company Ltd to an independent entity, Bayer has been asked to divest its "glufosinate ammonium (a non-selective herbicide)", "crop traits of cotton and corn" and "hybrid seeds of vegetables" businesses.
Further, Bayer has to follow certain commitments for seven years from the closing of the deal.
According to the release, the remedies ordered by the Commission would strengthen the agricultural input suppliers in India, by enabling innovation and launch of new products for the benefit of the farmers.
"The resultant entity of the combination would follow a policy of broad based, non-exclusive licensing of Genetically Modified (GM) as well as non-GM traits currently commercialised in India or to be introduced in India in the future, on a fair, reasonable and non-discriminatory terms (FRAND terms)," the release said.
As per the CCI, the combined entity would follow a policy of non-exclusive licensing of non-selective herbicides and their active ingredients in case of launch of new GM and non-GM traits in India that impose restrictions on agricultural producers. These include allowing farmers to use specific non-selective herbicides being supplied only by the parties, on a fair, reasonable and non-discriminatory basis.
Further, the combined entity has to allow Indian users or potential licensees to access the existing Indian agro-climatic data owned and used by it for its digital applications commercialised in the country.
The combined entity would have to let the users access its commercialised digital farming platforms for supplying or selling agricultural inputs to agricultural producers in India as well as its digital farming applications on subscription basis, the release noted.
"This remedy shall operate for a period of 7 years from the commencement of commercialisation of digital farming product(s) or digital farming platform(s), subject to a total period of 10 years from the closing of the combination," the statement said.
The "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," the release said.
The CCI has barred the combined entity 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. It is also restrained from imposing commercial dealings capable of causing exclusivity in the sales channel for supply of agricultural products.
"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," the release said.
Earlier this month, Bayer had announced completion of the deal to acquire Monsanto to create the world's biggest agro-chemical and seed company.
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