PIONEER / PANNAR SEED MERGER APPROVED BY THE COMPETITION APPEAL COURT

Tuesday, May 29, 2012
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After being prohibited by the Competition Commission in 2010 and by the Competition Tribunal in 2011, the proposed acquisition by Pioneer Hi-Bred International (“Pioneer”), a US based multinational seed producer (controlled by Du Pont) of locally based seed company, Pannar Seed (“Pannar”) was conditionally approved yesterday by the Competition Appeal Court (“CAC”). rnrnThis merger was seen by the Commission as a so-called three-to-two merger in the maize seed market. The major players in this market are Pioneer, Pannar and Monsanto. rnrnBoth the Commission and Tribunal prohibited the merger on the basis that it would result in a substantial prevention or lessening of competition in the relevant maize seed market(s) that could not be outweighed by any technological, efficiency or other pro-competitive gain likely to arise from combining the two businesses. The Commission and Tribunal favoured the purchase of the Pannar business by an alternate buyer (such as Syngenta or Dow).

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