Series: The Business of Globalization - Part 1; Market Trends, Business M&A’s, Emerging Markets & Economic Impacts
In part 1 of a new series, we will discuss mergers, acquisitions, growth trends, globalization efforts, & concerns of industry domination.
New Series: The Business of Globalization 🌍
This is going to be at least a 3 part series. Each post has a common theme of how globalization is changing the American economy in various ways.
The first installment is this one, Part 1; Market Trends, Business M&A’s, Emerging Markets & Economic Impacts. The next one is part 2: Anti-Competitive Rules, Laws and Regulations in the USA and the agencies that monitor and enforce the law. There will also be a tie in of under enforced anticompetitive businesses that have become global, gaining access to foreign markets at a price and how that ties into the Business of Globalization theme. Part 3: The Biosciences Industry; The Market Leaders Bringing RNA technology to our food supply. Oddly enough, I started off with part 3 and ended up finding so much more. Ready? Let’s dive in to Part 1 and discuss these mergers between agriculture and pharmaceutical businesses.
Analysis of Recent Big Agriculture & Big Pharma Mergers
The past two years have seen significant consolidation in the agricultural and pharmaceutical sectors, driven by a combination of strategic mergers, regulatory scrutiny, and market dynamics. These mergers have reshaped the global landscape of agribusiness and pharmaceuticals, raising concerns about market concentration, innovation, and regulatory oversight.
Developments in Big Agriculture Mergers ~ Older Mergers(Going Back to 2016) the impacts of these mergers continue to rattle our economy today
1. Bayer-Monsanto Merger (2018):
🎥Megyn Kelly “Shocking Implications of Pharma Company Bayer Acquired by Agricultural Company Monsanto, with Dr. Hyman” 1:16
Although the Bayer-Monsanto merger was finalized in 2018, its impact has continued to reverberate through the agricultural sector. The merger created a corporate behemoth controlling 29% of the world’s seeds and 24% of the world’s pesticides, making it the largest agribusiness on Earth. This consolidation has raised alarms about the centralization of power in the hands of a few corporations, potentially affecting farmers' access to seeds and agricultural chemicals.
2. Dow-DuPont Merger(2017):
INTRO/OPPOSITION:
Opposition to Dow - DuPont Merger in the USA; FNU & NCGA. Read full comments here. There was actually opposition from the Australian Competition and Consumer Commission(ACCC) as well, as expressed in an official statement of issues letter released in 2016, citing many of the same concerns of the American Farmers and Corn Growers Unions. The statement of concerns specifically acknowledged that Australian farmers were up against a powerful global company, which is able to dominate the R&D industry to bring new products to market.
In the end, the merger was approved. You can read the DOJ decision document below.👇
https://www.sec.gov/Archives/edgar/data/1666700/000166670018000009/R11.htm
The merger of Dow Chemical and DuPont in 2017 was another significant event that has continued to influence the agricultural, health, electronics, chemicals and biotechnology sectors. The combined entity later split into three independent companies, focusing on agriculture, materials science, and specialty products. This restructuring aimed to enhance operational efficiency and focus on core competencies, but it also contributed to the consolidation of the agricultural chemical market.
Three industry sectors that Dow-DuPont split into and their corresponding businesses
1️⃣The agriculture business, named Corteva Agriscience, combined Dow and DuPont's seed and crop protection units, with an approximate revenue of $16 billion.
2️⃣ The materials science segment, retained the Dow Chemical name and included DuPont's Performance Materials unit, along with Dow's Performance Plastics, Materials and Chemicals, Infrastructure and Consumer Solutions.
3️⃣ The specialty products business retained the DuPont name and incorporated four key businesses, including DuPont's Nutrition & Health. Expansion into the Industrial Biosciences industry and Nutrition & Biosciences Segment were notable impacts on the market, fueling growth for the bioscience market, in general.
There was also Protective Solutions businesses, as well as the integration of DuPont's Electronics & Communications business with Dow's Electronic Materials business unit.
3. Syngenta-ChemChinaAcquisition(2016):
In 2016, ChemChina acquired Syngenta for $43 billion, marking one of the largest foreign acquisitions by a Chinese company. This also happened alongside major farmland purchases by Chinese nationals in the United States. This merger has strengthened Syngenta's position in the global agricultural market, particularly in Asia, and has raised questions about the influence of state-owned enterprises in the agricultural sector. This may also pose a national security risk since this company is directly related to our food supply.
Recent Developments in Big Pharma Mergers
1. Johnson & Johnson's Performance: Johnson & Johnson has been a standout performer in the pharmaceutical sector, beating profit estimates on strong sales of its drug Darzalex and medtech products. They have entered new healthcare markets, as well, such as eye care and the eye surgical market, using more M&A’s to buy long standing companies like Abbott medical, a top competitor in the eye care world. The company's success highlights the ongoing demand of industry innovation and diversification in the pharmaceutical industry. These demands are most likely being driven by global competition in R&D.
2. AI in Pharma: The adoption of artificial intelligence (AI) in the pharmaceutical industry has accelerated, with major players like Sanofi, Pfizer, and AstraZeneca investing heavily in AI-driven drug discovery and development. Stated reasons for AI in Pharma include: Using AI to optimize clinical trials, reduce therapeutic development costs, and identify novel targets for diseases. This trend is expected to continue, with the global AI in drug discovery market projected to reach $11 billion by 2030. Also, let’s not forget the Project Stargate Investment, that will most likely be receiving funds in Big Ag and Big Pharma - both have developed aggressive technology goals that include the use of AI.
3. Regulatory Scrutiny: The pharmaceutical industry has faced increased regulatory scrutiny, particularly regarding drug pricing and market access. Some experts claim that the Inflation Reduction Act has intensified pricing pressure, leading to a scramble for real-world data and faster trials.
☝️ That’s the canned answer. I have my doubts about those reasons. Others may say, that is an excuse to reduce labor costs in lieu of AI, over human capital and an attempt to fast track clinical trials to get drugs to market at a much faster pace. Additionally, the potential for 200% tariffs on imported drugs has added uncertainty to the market - which begs the question, why are we not manufacturing these pharmaceuticals here in the USA to begin with?
After looking at these mergers and acquisitions, I am noticing a push to globalize businesses - once that happens, priorities shift in all types of ways, such as ☝️(chart) ESG (Environmental Social Governance)which includes initiatives like celebrating Pride Month in the workplace, Diversity, Equity & Inclusion hiring quotas, etc., that in many ways, conflict with Western values and laws, in order to take part in their (WEF) markets around the world. Once a corporation succumbs to these contractual obligations, which usually involves globalists sitting on their board of directors, this usually results in negative outcomes for American consumers and the competition of these globalized businesses in the USA, who are typically American owned and operated, business competitors to these very well funded globalists. In short, once a global giant steps into an industry and starts on it’s path for market domination, small and mid-size businesses have a hard time competing for various reasons, but mainly due to not outsourcing cheap labor, or not buying cheaper parts overseas or not outsourcing services, or manufacturing overseas. In other words, they face being crushed and pushed out of the market completely, usually because these globalists are pushing the average market prices down using unethical means (like sweat shops, slave labor or illegal aliens that will work for very cheap wages). All very real threats when your midsize business is already operating on a thin profit margin. When some business owners are pushed into a corner, their values go out the window. It’s easy to pass judgment, and that’s not really my point, or my intention. I’m just trying to express the hard position American businesses have been put in. Here is some advice though; when one door closes, another one opens. You should never have to give up your principles to maintain your business. There is always another way!!
Impact and Implications
1. Market Concentration: The mergers in both the agricultural and pharmaceutical sectors have led to increased market concentration, raising concerns about monopolistic practices and reduced competition. In agriculture, the top four firms now control around 70% of the global pesticide market, while in pharmaceuticals, a few large companies dominate drug development and distribution.
2. Innovation and R&D: Despite the concerns about market concentration, these mergers have also driven significant investment in research and development. Some see this as a positive and some as a negative. The integration of AI and other advanced technologies have the potential to revolutionize drug discovery and agricultural practices, leading to more efficient and effective solutions, while at the same time, it also has the ability to cause massive harm if these practices are being used with malicious intent to humans, animals and environmental health. These R&D ventures could lead to more and more surveillance, less reliance on humans to do jobs, locking farmimg equipment into manufacturer only repairs that are expensive and complicated, and higher risks for being controlled/surveilled by AI systems in just about every aspect of our lives and businesses, from banking, our food supply, to driving and traveling and our healthcare, to name a few. There is a middle ground somewhere, but it takes ethical people to develop protective regulatory framework. Not protective just to a company, which is all well and fine, as long as it’s not at the expense of causing harm to consumers or workers.
I can almost guarantee that ‘middle ground’ of AI regulation, will not come from global giants attempting to dominate nearly every industry, using private equity firms, skating SEC /FTC rules and regulations, who want to privatize water rights, want to create social credit scores, and digital ID’s & carbon credits, to name a few. The best choice to lead the way on AI regulation is American business leaders, specific to their industries, with no conflicting loyalties or dual citizenships, that have skin in the game in this country, like a family, friends, property, community involvement, have excellent business and professional relationships within their networks, and most importantly, the people they deal with, and their employees generally like them. Yes, character is important when empowering individuals to design ethical regulations that could have massive implications!!! We need ethical people to design ethical standards-what a novel idea!! I’ll be waiting for my Pulitzer Prize. 🏆 😏 But I’ll settle for a like on this post, if you agree. 😉
3. Regulatory and Ethical Concerns: The consolidation of power in the hands of a few large corporations has raised ethical and regulatory concerns. My comments above under R&D, bleed over into this category as well. There are fears about the influence of these companies on regulatory decisions, the potential for price gouging, and the impact on small farmers and independent researchers. The historical ties of some of these companies to controversial practices, such as the use of harmful chemicals and unethical experimentation, have further fueled public skepticism
4. Global Trade and Economic Implications: The mergers have also had implications for global trade and economic policies. Some have mentioned a potential for trade wars over genetically modified organisms (GMOs) and the influence of state-owned enterprises like ChemChina have added complexity to international trade relations. I think if more Americans understood GMO foods, they would stay away from them, or at least cut back on consumption. I don’t believe these trade wars will come from consumer demand, they will most likely come from B2B sales. Licensing deals. Government contracts, all out of the purview of the end consumer. Consumers remain largely unaware, mainly due to lack of transparency. I believe our country could solve many of these problems with a shift in mind set. Sure, we can have trade relations with other countries. But don’t you think we should be at a point of self reliance if unknown international factors come into play? Perhaps keeping our import levels under 20-30% (or even lower?)in any given industry. Just an idea. 💡
Conclusion & Final Thoughts
The past two years have been marked by significant consolidation in both the agricultural and pharmaceutical sectors, but what we are seeing is a result of decades of planning coming to fruition. Monsanto has been causing harm for decades, and when they started getting sued, perhaps the Bayer merger was a bail out. While these mergers have the potential to drive innovation and efficiency, they also raise important questions about market concentration, regulatory oversight, and ethical practices. As the industries continues to evolve, it will be crucial to balance the benefits of consolidation with the need for fair competition and responsible corporate behavior.
The backbone of our country’s economy should be Americans having the opportunities to invest, invent, create jobs, building manufacturing plants here at home and that, IS, generally a good thing for our economic stability.
There is a lot we can do when we become aware of an issue. Like the globalization of American businesses. More on that to come. Stay tuned.
A Teaser for Things to Come……..
Series: The Business of Globalization
Part 2: Anti-Competitive Rules, Laws and Regulations in the USA; the agencies that monitor and enforce the law
We will explore the agencies that are involved in keeping our capitalist market running fairly and in compliance with the law. There is a tool that allows us to look up companies and their histories. I’m curious about a few and how they have not been investigated or still allowed to operate with such blatant anticompetitive practices. Could it be their links to the WEF and Globalization? We will see in the next post.... 😉
I hope you learned something or were at least entertained. Let me know what you think of these mergers between Big Ag and Big Pharma in the comments! Thanks for reading. ✌️