Monsanto's or AgrEvo's herbicides for those sold by their competitors, increasing Monsanto 's and AgrEvo's overall profit.
While concentration appears to be increasing in a number of major seed markets (see below), it is not clear whether this increase in concentration is attributable to the wave of recent mergers. The seed industry underwent a similar wave in the late 1970s, as petrochemical companies (Shell and Arco), pharmaceutical manufacturers (Ciba-Geigy, FMC, Pfizer, Sandoz, and Upjohn), and other chemical firms (W.R. Grace) acquired both biotechnology firms and seed companies (McMullen 1987; Kloppenburg 1988; Hayenga and Kimle 1992). Agricultural biotechnology and the prospect of expanding markets for US farm exports were principal motivations. The fall in farm exports and the ensuing farm financial crisis of the 1980s led petrochemical and specialty-chemical firms to leave this industry and to sell their biotechnology and seed subsidiaries to agrichemical companies. Some pharmaceutical firms also left the agrichemical business to concentrate on human-health and veterinary products. As a result, some of the current wave of mergers consist of changes in parent companies rather than new consolidation.
Two measures are widely used to determine the degree of concentration in an industry. The four-firm concentration ratio (C4) is the sum of the shares of total sales in an industry accounted for by the four largest firms in the industry. The Herfindahl-Hirschman Index (HHI) is the sum of the squared percentages of the industry's total sales accounted for by