WEBVTT - Bloomberg's Rie on Antitrust Issues For Bayer-Monsanto (Audio)

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<v Speaker 1>Global business news twenty four hours a day. If Bloomberg

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<v Speaker 1>This is a Bloomberg Business Flash from Bloomberg World Headquarters.

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<v Speaker 1>I'm Charlie peltonal the SMP NESDAK all declining right now.

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<v Speaker 1>Let's head over to the First Word Breaking news desk

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<v Speaker 1>for today's afternoon call. And here's Bill Maloney. Good afternoon, Charlie.

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<v Speaker 1>Stocks are under pressure today, with the Dow currently lower

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<v Speaker 1>by a hundred and twenty point says if he's dropped

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<v Speaker 1>seven and as that lower by two and a half.

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<v Speaker 1>This morning, the Dallas Fetti manufacturing was a big miss,

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<v Speaker 1>and a UK online poll on the EU showed forty

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<v Speaker 1>seven percent leave remained. The small cap six hundreds down

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<v Speaker 1>to point and the US ten y yield fell to

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<v Speaker 1>one point eight three percent after hitting one point eight

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<v Speaker 1>nine percent, and crew features faded from the fifty dollar level.

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<v Speaker 1>Eight out of tennis B sectors are lower, led by

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<v Speaker 1>losses and staples, energy and the materials. Only Telecom and

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<v Speaker 1>utilities gained doubt Transports rise three points and as a

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<v Speaker 1>biotext climb seven, and the vix is higher by thirteen percent.

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<v Speaker 1>Dell leaders of the downside include Boeing DuPont and Nike,

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<v Speaker 1>small games for Verizon and Caterpillar. Amazon traded to a

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<v Speaker 1>new all time intur day high, hitting seven hundred and

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<v Speaker 1>twenty four hours to share. Apple traded back below the

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<v Speaker 1>hundred dollar level, and Great Plains Energy fell six percent

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<v Speaker 1>after its deal for west Star after the belt tonight,

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<v Speaker 1>look for earnings from work Day Live on the first

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<v Speaker 1>Breaking News desk on Bow Maloney. Charlie all right, thank

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<v Speaker 1>you very much, Bill Maloney, and we are brought to

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<v Speaker 1>you by Brown University with the new Executive Master in

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<v Speaker 1>Strategy is the best security to hear live breaking news

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<v Speaker 1>over your Bloomberg type squawk escue you a w K

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<v Speaker 1>on your terminal. I'm Charlie Pellet. That's a Bloomberg business flash.

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<v Speaker 1>You're listening to taking stock with pin Box and Kathleen

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<v Speaker 1>has on Bloomberg Radio. Monsanto may have initially rejected buyers

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<v Speaker 1>sixty two billion dollar takeover bid. Bloomberg First Word reporting

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<v Speaker 1>that Street Insiders says they are ready to raise their

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<v Speaker 1>bid to a dollar thirty five or excuse me, a

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<v Speaker 1>hundred hundred thirty five share. Excuse me, got my decimal

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<v Speaker 1>point in the wrong place. That's where the focus has

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<v Speaker 1>been a lot on on when it comes to Wall

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<v Speaker 1>Street in analysts. But our next guest is looking at

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<v Speaker 1>a very important part of this, and that's the rigorous

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<v Speaker 1>review by anti trust regulators that buyer will face in

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<v Speaker 1>multiple jurisdictions around the world. What does this mean for

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<v Speaker 1>the deal? Jennifer Jennifer rehe Is. Here's he's senior litigation

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<v Speaker 1>analysts for Bloomberg Intelligence and she's joining us in our

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<v Speaker 1>New York studio. Welcome, Jennifer, Thank you so much for

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<v Speaker 1>having me. So again, let's put all that price stuff,

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<v Speaker 1>because if they really want to do this, they're going

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<v Speaker 1>to come to a price, right. The question is that's

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<v Speaker 1>just one step then have to get past the regulatars.

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<v Speaker 1>What's the biggest issue on that those regulators minds? You know,

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<v Speaker 1>I think the biggest issue is that we're looking at

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<v Speaker 1>a lot of concentration in what you might want to call,

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<v Speaker 1>you know, agricultural or chemical areas, so you know, three

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<v Speaker 1>different deals that are ongoing at the same time that

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<v Speaker 1>are all global in nature, that deal with various crop

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<v Speaker 1>protection chemicals and with seeds, and there's a lot of

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<v Speaker 1>nervousness about the way the regulators are going to view

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<v Speaker 1>these deals, given what they've done with Haliburton and Baker

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<v Speaker 1>Hughes and a few other deals in the past. Um

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<v Speaker 1>and whether this might be deemed too much concentration. Now

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<v Speaker 1>here's a quote, and I'd like your thoughts and maybe

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<v Speaker 1>you can figure out exactly what this would mean for

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<v Speaker 1>people that are involved in the legal issues of this

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<v Speaker 1>potential combination. This is coming from Robert Lawrence. He's a

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<v Speaker 1>Johns Hopkins School of Medicine professors, also the founding director

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<v Speaker 1>of the Center for a Livable Future. He says, the

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<v Speaker 1>fact is we went from having probably thirty to forty

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<v Speaker 1>varieties of soybeans to now having one variety making up

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<v Speaker 1>nearly all of US soybean production. So as set aside

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<v Speaker 1>the business aspect of what this means for farmers, but

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<v Speaker 1>just in terms of having to only rely on one variety, well,

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<v Speaker 1>you know the fact that that might have happened, you know,

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<v Speaker 1>we have to understand why that happened and how that

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<v Speaker 1>came about. If that happened due to increased concentration and

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<v Speaker 1>less competition. It's one thing, but the anti trust laws

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<v Speaker 1>will focus on increased competion, competition, but a decrease in competition,

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<v Speaker 1>less innovation, and less choice from mergers. So they'll look

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<v Speaker 1>at the effect of these deals and whether these deals

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<v Speaker 1>may continue to contribute to that. They may not look at,

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<v Speaker 1>you know, they'll look the way things stand today, but

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<v Speaker 1>they look at will it for will they further contribute

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<v Speaker 1>and if in fact it will, is there something can

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<v Speaker 1>that can be done? Are there concessions or divestitures or

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<v Speaker 1>let's say, changes the licenses that can be agreed to

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<v Speaker 1>in order to allow these deals to go forward and

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<v Speaker 1>perhaps fix that problem going forward? So is it give

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<v Speaker 1>us just a sense of do there are the issues

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<v Speaker 1>pretty much the same among antitrust regulators around the world.

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<v Speaker 1>If you go from the US to Germany to gosh,

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<v Speaker 1>you know, Japan, is it different? It is different? You know,

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<v Speaker 1>there are many many similarities, but there are also differences.

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<v Speaker 1>And to start with in this industry, what we've seen

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<v Speaker 1>so far historically is that these regulators will look at

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<v Speaker 1>the effect on in this area country by country and

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<v Speaker 1>not necessarily globally. So, for instance, if the European regulators

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<v Speaker 1>are looking at how it affects competition European Union wide

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<v Speaker 1>or country by country within Europe, that's going to be

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<v Speaker 1>different than the way the U S regulators may look

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<v Speaker 1>at it, who are focusing on how does it affect

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<v Speaker 1>the United States UH and China, which might be asking

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<v Speaker 1>how does this affect China. There are times when the

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<v Speaker 1>regulators will say, this is a global market, how does

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<v Speaker 1>it affect the world the globally? But in this area,

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<v Speaker 1>at least in the past, historically they have looked at

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<v Speaker 1>the areas when they've assessed past deals country by country. Well,

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<v Speaker 1>just to just to sort of underscore your point about

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<v Speaker 1>this consolidation, we're talking about Dow Chemical and DuPont combining,

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<v Speaker 1>then c Genta, and then you've got the Chinese state

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<v Speaker 1>owned company KEM China KIM China, right, So a real

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<v Speaker 1>concentration in this particular industry group. Right. But again, the regulators,

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<v Speaker 1>the first thing they ask is where do these companies

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<v Speaker 1>compete in terms of products and services? And where do

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<v Speaker 1>they compete geographically? And that's the starting point and you

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<v Speaker 1>have to ask that. And when you ask that, and

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<v Speaker 1>you start to look at these deals, you realize, okay, well,

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<v Speaker 1>KEM China and cin Ginda don't necessarily overlap in every

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<v Speaker 1>country in the US, and for every product, they don't

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<v Speaker 1>necessarily compete everywhere. And the same thing could be true.

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<v Speaker 1>Let's say for seeds. You know you have buyer that

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<v Speaker 1>isn't so big in seeds and bigger and crop protection

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<v Speaker 1>and and and more complementary perhaps to mind Santo, and

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<v Speaker 1>you've got to kind of dig into that nitty gritty

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<v Speaker 1>to understand where the competition issues are going to lie.

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<v Speaker 1>I would imagine they're also going to have to learn

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<v Speaker 1>about the diseases that might affect No, seriously, that might

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<v Speaker 1>affect some of these crops, because if you're only depending

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<v Speaker 1>on one variety, then it doesn't matter what if did

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<v Speaker 1>the business. It will devastate the agricultural community. Absolutely. You know,

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<v Speaker 1>they dig in hard, these regulators. That's why these things

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<v Speaker 1>taken here. They look at everything. Yes, or notice, let's

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<v Speaker 1>go through the steel. Do they make it past just

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<v Speaker 1>I think yes, with with some concessions. I'm thank you

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<v Speaker 1>very much for coming in and spending time with us.

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<v Speaker 1>Jennifer Rees, senior litigation analysts for Bloomberg Intelligence. Shares of

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<v Speaker 1>Monsanto they are up about two and a half percent

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<v Speaker 1>right now, and shares of Buyer down about one percent.

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<v Speaker 1>You're listening to Taking Stock on Bloomberg Radio. Bloomberg Taking

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