Tribunal disallows tie-up by seed giants

Johannesburg,- The Competition Tribunal has prohibited the merger between the US multinational Pioneer Hi-Bred International, and SA's Pannar Seed.

The verdict - delivered on Friday - came after a three-week hearing in which the tribunal heard evidence from several witnesses about the potential impact of the deal on the maize seed market in SA, including the effects on small and subsistence farmers.

In terms of the proposed tie-up, Pioneer would acquire control of Pannar. They are the second and third largest maize seed producers and suppliers in SA, respectively.

The only other significant player in this market is Monsanto SA. Thus the proposed merger would reduce the number of players in this market from three to two, the tribunal noted.

The Competition Commission, which had initially assessed the intermediate merger, prohibited the transaction in December 2010 on the basis that it would substantially lessen competition in the local maize seed market.

Pioneer intended to expand the two businesses' existing SA research capabilities, making SA one of Pioneer's major research hubs outside the United States in addition to existing hubs in Brazil, China and India.

The research hubs were intended to help stimulate a transfer of skills and technology to SA, with benefits to farmers and consumers throughout Africa. The partnership allows Pannar access to Pioneer's complementary plant genetics and advanced breeding technologies.

The companies said they were disappointed. "We will be studying the detail of the decision and will decide on any future action."
ZAR/USD
17.37
(+0.65)
ZAR/GBP
22.65
(+0.83)
ZAR/EUR
20.49
(+0.24)
ZAR/AUD
12.42
(+0.67)
ZAR/JPY
0.16
(+1.06)
Gold
1937.21
(+1.65)
Silver
25.60
(+3.14)
Platinum
936.00
(+1.73)
Brent Crude
44.46
(-1.09)
Palladium
2152.50
(+2.91)
All Share
57405.73
(+0.42)
Top 40
53084.24
(+0.48)
Financial 15
10189.82
(-0.25)
Industrial 25
76184.74
(+0.87)
Resource 10
58732.21
(+0.09)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 967 votes
It depends on how the funds are used.
74% - 6444 votes
No. We should have gotten the loan elsewhere.
15% - 1333 votes
Vote