USA – Bayer, the German multinational’s US$60 billion bid to acquire Monsanto has received an approval from the US Justice Department after both the companies made divestments to meet anti-trust requirements.

The deal between the two forms one of the largest integrated pesticides and seeds company, a sector that has seen robust growth, coupled with new environmental regulations and changing crop mixes.

The fact that the merger forms a conglomerate that would have a share of more than a quarter of the world’s seeds and pesticides market; regulators have raised their concerns prompting a divestiture of some of their businesses.

The nod came after Bayer agreed to sell additional seed and treatment assets to BASF SE and agreed to make concessions related to digital agriculture, reported the Wall Street Journal, citing people familiar with the matter.

While the world agricultural pesticide industry is said to be worth US$49 billion, the demand is expected to grow especially in developing countries including Eastern Europe, South America and Asia.

The seed market has tripled since 2000 and reached approximately US$50 billion in 2014, and with prospective investments from major players such as DuPont, Syngenta, Groupe Limagrain, this is prospected to grow, according to Mordor Intelligence.

According to analysts, the deal reduces competition for sales of seeds and chemicals to farmers struggling with low crop prices, raising the risk for price gouging.

Other concerns that arose directed on allegations that the merged firm will have extreme control over farmers’ data, genetics, biotechnology traits or the associated agrichemical industry.

In its quarterly earnings report, Monsanto said that it was confident that the US, where genetically modified seeds are widely used, would grant the nod while expecting to secure other regulatory approvals within the second quarter.

2017 saw a number of transformational mergers as companies try to leverage their strengths to boost sales and drive growth.

These involve a merger of ChemChina and Syngenta and a tie-up between Dow Chemical Company and DuPont to form a combined entity with three divisions; agriculture, materials science and specialty products.