Monday, November 23, 2015

Big mergers in input industries?

A series of major mergers is in prospect in the agricultural input industries. Having seen off repeated approaches from US rival Monsanto, Swiss group Syngenta is now seeking to combine its strength in crop chemicals with other groups' leading positions in agricultural seeds. Other leaders in the business including Monsanto, Dupont's seed business Pioneer and the agricultural units of Dow Chemical, BASF and Bayer.

Syngenta chairman Michael Demaré told the Financial Times, 'On the crop chemical side, we are the strong leader. On the seed side, Monsanto and [Dupont's] Pioneer are the key leaders. The winning company in the future will be the one that can combine these two strengths and have an integrated offer.'

Further concentration among the 'big six' would have implications for competitiveness. It would also enhance the global political influence that these companies are able to exert. There is often an under estimation of how influential the input industries are in supporting agriculture politically.

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