SIX companies dominate the business of farm supplies. If Monsanto, the world’s biggest seed producer, succeeds in its bid for Syngenta, the largest agrichemicals firm, just five will remain. That inevitably raises worries about whether the reduction in competition will mean less innovation—and thus slower improvements in crop yields—as well as higher costs for farmers. The combined group would have about a third of the world market for crop seeds to itself.
Syngenta has been playing hard to get. It rebuffed a bid of $45 billion in June. But Monsanto is not giving up. On August 24th it was reported to have increased its bid to around $47 billion. The takeover battle has stimulated the interest of other big agricultural suppliers, so a consolidation of the industry may be in prospect even if Syngenta were to escape Monsanto’s clutches. BASF, another of the big six, has reportedly been seeking financing to make a rival offer.
Two decades ago the industry was far more fragmented. In 1994 the top four companies in the worldwide market for seeds and crop biotechnology had a combined share of 21%. By 2009 the top four’s share...Continue reading
Source :Business and finance http://ift.tt/1PQ9XZx
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