By RTE News Service ReporterMonsanto and Bayer have filed for bankruptcy protection in Ireland, following a long-running legal battle over the agribusiness giant’s controversial genetically engineered (GE) corn and cotton crops.
The US$7.4bn bankruptcy filing is the latest twist in a dispute that has dragged on for more than 20 years, with a landmark court case brought by farmers, consumers and politicians.
Bayer and Monsanto argue that their corn and seeds are safer and healthier than the GE variety that was originally developed by the US biotechnology company.
The EU has also filed a complaint, accusing the two agrochemicals of violating the EU’s food safety laws.
Besieged in IrelandThe saga began when a court ruled in the US in 2016 that the US biotech company’s genetically engineered corn and sugarbeet seeds could not be grown in Ireland under EU food safety regulations.
A similar ruling was also issued in Belgium, where Bayer has a significant shareholding in its own agribosystems.
It is this second ruling that prompted a European court to rule in March that the two firms could not claim the EU as a beneficiary under its food safety law.
But the case against the two companies, filed by farmers in the Irish courts, has dragged into court for years.
Barry Mulligan, the general secretary of the Irish Farmers Federation, said the court’s ruling in Belgium was a major setback for the EU, which has already invested over €1bn in Irish agrochemical industries.
Mulligan told RTE: “We were really disappointed that the court was coming down hard on the European Union.
It’s a shame because we’ve been doing this for a long time and it’s a good example for us that we can come up with a good solution.”
Bayer is the world’s largest corn and seed manufacturer, producing more than 1.6 billion bushels of seed a year.
Millsons has been struggling financially for years as its GMO crops have been rejected by regulators and farmers across the globe.
The firm’s shares fell by almost two-thirds last year after the EU threatened to slap sanctions on the company if it did not reverse course on its GMO corn.
Boeing, which made a record €2.9bn in sales last year, also faced stiff opposition from farmers and politicians in Europe.
It also faced criticism over its alleged role in the contamination of a nearby lake, where the US chemical giant used pesticides to treat the water.
Binned assetsIn an attempt to avoid paying billions in compensation to farmers, Bayer is now planning to sell its €2bn stake in the biotech company, according to a report by the Financial Times.
The merger, which will see the merged companies merge in a single entity, will see Bayer’s entire €1.3bn stake and shareholding divided up into two separate entities.
The two companies will also each receive a €500m dividend.
However, the report claims that Bayer will continue to own its entire shareholding, while Monsanto will continue as a “bundled” company.
It added that Monsanto’s stake will remain in the company but that Bayer’s will be split up and sold to a private company.
“The combined company will continue in the form of a publicly traded company that is not subject to the public markets and is not a wholly-owned subsidiary of Bayer or Monsanto,” the report said.
The deal is expected to close in the first half of next year.
“There’s no question that the combined company is going to be a much better-managed and a much more cost-effective business,” said Mulligan.
“Monsonsons has got the bigger stake, the bigger shareholding and is more cost efficient.
So the combination is a much cheaper deal for the taxpayers, for the taxpayer’s interests and for the people of Ireland.”
The company has also promised to bring in an additional €600m from a sale of its remaining stake in Dow Chemical.
Bilal Baroudi, the chairman of the European Farmers Federation said the deal was a significant step in the right direction, adding that it would give farmers a fairer deal.
“We’ve always said that if we were to have a company like Monsanto that was responsible for the quality of the seed, it would be much more expensive,” Baroudisaid.
“So it’s important that we get to the bottom of what was going on and what we should do to help the farmers.”
The Irish Farmers’ Federation said that it welcomed the news and would work with Monsanto and Bayer to ensure that farmers were not put at risk.