There's no way Bayer's (BAYRY) $62 billion bid for genetically modified seedmaker Monsanto (MON) can survive the heightened U.S. government scrutiny that has already prevented deals including Halliburton's (HAL - Get Report) proposed merger with Baker Hughes (BHI) .
The farmers won't stand for it, not with this much crop protection/seed market share. This is why I believe this deal will be blocked.
Bayer, the Germany-based conglomerate with specialties in health care and agriculture says in a statement that it "has a highly successful track record working together with global authorities to gain regulatory approvals, given our prior acquisition experience including Aventis CropScience, Schering AG, and Merck Consumer Care."
That's too optimistic, given the regulatory environment in the U.S.
A suit by the U.S. Justice Department to block Halliburton's merger with Baker Hughes this year is part of a larger pattern of increased opposition by the federal government to some mergers and acquisitions.
Using data from the Federal Trade Commission and The Deal, a subsidiary of TheStreet.com, TheStreet discovered a pattern of increased regulatory actions challenging mergers that dates back to the Reagan administration.
Under President Obama, the FTC, DOJ and other regulatory bodies have challenged and blocked a higher proportion of U.S. deals than ever before. At the same time, deals are getting bigger and more complicated. Call it "Big Business vs. Big Government."
With Halliburton, the Department of Justice filed a civil antitrust lawsuit in the U.S. District Court in Delaware claiming that the deal threatens to eliminate competition, raise prices and reduce innovation in the oilfield services sector. The complaint alleged that the acquisition would eliminate important head-to-head competition in markets for 23 products or services used for on- and off-shore oil exploration and production in the U.S.
The government made similar arguments when it sued to block the sale of General Electric's (GE - Get Report) appliances business to Electrolux. GE, an Action Alerts PLUS holding, eventually scrapped that deal and sold the business to Chinese company Qingdao Haier for $2 billion more.