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Fast Money & Foreign Objects
Why Trump’s Meetings With CEOs Seeking Mergers Trouble Observers
The president has flouted decades-old norms of antitrust by directly speaking with the executives of companies seeking to merge.
by Justin Elliott and Jesse Eisinger
ProPublica, Jan. 25, 2017, 11 a.m.
President Donald Trump speaks at a breakfast with business leaders in the Roosevelt Room of the White House on Jan. 23. (Pablo Martinez Monsivais/AP Photo)
When the CEOs of Monsanto and Bayer met now-President Donald Trump earlier this month, eager for a nod of assent for their controversial merger into an agrochemical and seed giant, they promised jobs and investment.
Sure enough, a week later, the companies and a Trump spokesman announced that the combined company wouldcreate several thousand new U.S. jobs. Trump himself Twitter-touted the companies’ pledge.
But as Trump talked with the CEOs from his perch on Fifth Avenue, antitrust experts shook their heads.
By meeting with the CEOs of Monsanto and Bayer as well as the head of AT&T, which is trying to merge with Time Warner, Trump has violated decades of White House practice by injecting himself directly into mergers awaiting Justice Department review.
“The public should be concerned that the career attorneys’ and economists’ analysis of the deals is not what the decision is going to be made on,” said **** Lackey, a former antitrust counsel to the Republican-led House Judiciary Committee.
Several former Justice Department antitrust officials said in interviews they are worried that Trump will cut deals with companies that could hurt American consumers.
“If a transaction is harmful to competition and merging companies raise prices to consumers by 10 to 15 percent, it would not be good to allow that to happen just because the merged companies created some jobs,” said Gene Kimmelman, who was chief counsel in the Antitrust Division during the Obama administration. “That would be a horrible trade-off.”
Critics of the roughly $60 billion Monsanto-Bayer deal say that it will give the combined company too much pricing power, particularly in the seed and pesticide markets. While Bayer is known for its aspirin and other consumer products, the German conglomerate is also a big player in agriculture.
“I am concerned that the merger will curtail chemical and seed choices, and raise prices for farmers and the American consumer,” said Sen. Charles Grassley, R-Iowa, in a letterto the Justice Department.
Bayer and Monsanto together control 70 percent of the U.S. market for cotton seeds.
Monsanto and Bayer announced after the Trump meeting that the combined company would spend $16 billion on research and development “over the next six years with at least half of this investment made in the United States.”
But it’s not at all clear that this investment is tied to the merger. As the Wall Street Journal has noted, that figure is not any higher than the rate at which the companies are already spending on R&D.
It’s also unclear what, if anything, Trump promised the CEOs in return for the jobs pledge. There have been conflicting reports about what happened in the meeting. The transition team didn’t respond to a request for comment. The companies declined to comment beyond a public statement that says they will “create several thousand new high-tech, well-paying jobs after integration is complete.”
Why Trump’s Meetings With CEOs Seeking Mergers Trouble Observers
continued in link
The president has flouted decades-old norms of antitrust by directly speaking with the executives of companies seeking to merge.
by Justin Elliott and Jesse Eisinger
ProPublica, Jan. 25, 2017, 11 a.m.
President Donald Trump speaks at a breakfast with business leaders in the Roosevelt Room of the White House on Jan. 23. (Pablo Martinez Monsivais/AP Photo)
When the CEOs of Monsanto and Bayer met now-President Donald Trump earlier this month, eager for a nod of assent for their controversial merger into an agrochemical and seed giant, they promised jobs and investment.
Sure enough, a week later, the companies and a Trump spokesman announced that the combined company wouldcreate several thousand new U.S. jobs. Trump himself Twitter-touted the companies’ pledge.
But as Trump talked with the CEOs from his perch on Fifth Avenue, antitrust experts shook their heads.
By meeting with the CEOs of Monsanto and Bayer as well as the head of AT&T, which is trying to merge with Time Warner, Trump has violated decades of White House practice by injecting himself directly into mergers awaiting Justice Department review.
“The public should be concerned that the career attorneys’ and economists’ analysis of the deals is not what the decision is going to be made on,” said **** Lackey, a former antitrust counsel to the Republican-led House Judiciary Committee.
Several former Justice Department antitrust officials said in interviews they are worried that Trump will cut deals with companies that could hurt American consumers.
“If a transaction is harmful to competition and merging companies raise prices to consumers by 10 to 15 percent, it would not be good to allow that to happen just because the merged companies created some jobs,” said Gene Kimmelman, who was chief counsel in the Antitrust Division during the Obama administration. “That would be a horrible trade-off.”
Critics of the roughly $60 billion Monsanto-Bayer deal say that it will give the combined company too much pricing power, particularly in the seed and pesticide markets. While Bayer is known for its aspirin and other consumer products, the German conglomerate is also a big player in agriculture.
“I am concerned that the merger will curtail chemical and seed choices, and raise prices for farmers and the American consumer,” said Sen. Charles Grassley, R-Iowa, in a letterto the Justice Department.
Bayer and Monsanto together control 70 percent of the U.S. market for cotton seeds.
Monsanto and Bayer announced after the Trump meeting that the combined company would spend $16 billion on research and development “over the next six years with at least half of this investment made in the United States.”
But it’s not at all clear that this investment is tied to the merger. As the Wall Street Journal has noted, that figure is not any higher than the rate at which the companies are already spending on R&D.
It’s also unclear what, if anything, Trump promised the CEOs in return for the jobs pledge. There have been conflicting reports about what happened in the meeting. The transition team didn’t respond to a request for comment. The companies declined to comment beyond a public statement that says they will “create several thousand new high-tech, well-paying jobs after integration is complete.”
Why Trump’s Meetings With CEOs Seeking Mergers Trouble Observers
continued in link
Republicans are hypocrites, none of this is surprise.