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Biotech / Medical : Monsanto Co. -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (731)	12/8/1998 12:47:00 PM
From: John F Beule	Read Replies (1) \| Respond to of 2539

Official Urges Hard Look at Cargill Grain Deal By Julie Vorman Reuters WASHINGTON (Dec. 7) - Agriculture Secretary Dan Glickman urged the Justice Department Monday to take a hard look at Cargill Inc.'s plan to buy assets of its archrival, saying the deal would give Cargill control over 42 percent of U.S. corn exports. The antitrust review of Cargill's acquisition of a large chunk of Continental Grain Co. is likely to take several months amid calls from agricultural groups for hearings to make sure farmers are not hurt by the deal. Both the Senate and House Agriculture committees said they plan to hold hearings taking a look at concentration in the agribusiness industry after Congress reconvenes in January. U.S. farmers are facing the lowest commodity prices in a generation because of a slump in Asian demand and overflowing world grain bins. Lawmakers in northern U.S. states, bracing for a jump in bankruptcies over the next few months, are worried that Cargill's acquisition could put even more of a squeeze on farmers. If allowed to buy out its longtime rival's grain business, privately-owned Cargill would control about 10 percent of the $50 billion U.S. grain market, according to farm analysts. The value of Cargill's acquisition has been estimated at nearly $1 billion by some experts. Agriculture Secretary Glickman, in a letter to U.S. Attorney General Janet Reno, said U.S. Agriculture Department data showed Cargill ''could command a sizable share'' of U.S. grain and oilseed exports. In fiscal 1998, Cargill and Continental shipped 42 percent of all U.S. corn inspected for export sales, Glickman said. The two companies shipped 31 percent of all U.S. soybeans, and exported 18 percent of all U.S. wheat. ''The combined firm could actually control much larger shares of total U.S. exports,'' Glickman said, referring to intra-company exports which do not have to be federally inspected. The USDA said it was also concerned about the deal's impact on U.S. grain storage capacity, which is a crucial component of futures contracts traded on the Chicago Board of Trade. Cargill would boost its storage to about 550 million bushels out of a total 7.15 billion bushels capacity throughout the nation. That would have a ''significant effect'' on some local grain markets, and limit farmers' options and possibly their net returns, Glickman said. Cargill has maintained that the acquisition would help U.S. farmers get their grain to market more efficiently, benefiting everyone in the supply chain. The complexity of Cargill's acquisition, proposed on Nov. 10, was underscored by how long government lawyers with the Federal Trade Commission and the Justice Department took to simply decide who would review the deal. With just three days remaining in the initial 30-day review period allowed under federal law, senior officials with both agencies finally agreed on Monday to give Justice attorneys authority over the case. Antitrust lawyers at Justice last month approved Monsanto Co's $2.3 billion acquisition of DeKalb Corp, and earlier this autumn won a price-fixing lawsuit against Archer Daniels Midland. But lawyers at the FTC wanted the case to familiarize themselves with an industry that has shows signs of further consolidation, a knowledgeable source said. ''There was some negotiating going on over this one,'' said the source, who is familiar with the case. ''This took much longer than usual to sort out who would handle it.'' Most likely, Justice Department regulators will now ask Cargill for additional information about the proposed deal, which could keep the clock ticking for an indefinite period. Cargill said it expected to receive a request for more information from the government. ''It's our intention to cooperate fully in the review,'' said a spokeswoman for Minneapolis-based Cargill. ''I'm assuming that they may ask for more information.'' Once Cargill provides the requested information, government regulators have 20 days to complete their review. But companies often waive the deadline, giving antitrust regulators more time to analyze the deal. The European Union was also expected to investigate the impact of Cargill's acquisition on European grain markets. REUTERS@ Reut14:17 12-07-98 Copyright 1998 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. All active hyperlinks have been inserted by AOL