Sat, Oct 14, 2017 - Page 10 News List

Bayer sells crop science units to rival BASF

EASING THE TAKEOVER:Leading up to its takeover of US seed maker Monsanto, Bayer seeks to address potential regulatory concerns by selling most of its agrichemical business


German chemicals and pharmaceuticals giant Bayer AG yesterday announced a multibillion-euro deal to sell parts of its agrichemical business to rival BASF SE, easing the path of its planned takeover of US seed maker Monsanto Co.

The 5.9 billion euro (US$7 billion) deal includes Bayer’s glufosinate ammonium herbicide business, “essentially all” of its crop seeds units, and related research and development activities and intellectual property, the company said in a statement.

Yesterday’s transaction was only to go ahead if Bayer’s Monsanto merger was approved by competition authorities, and was itself subject to a competition probe.

“We are taking an active approach to address potential regulatory concerns, with the goal of facilitating a successful close of the Monsanto transaction,” Bayer chief executive Werner Baumann said.

The European Commission said earlier this month that it would put on hold its competition probe of Bayer’s US$66 billion mega-deal — the largest in German history — to take over controversial US seeds and pesticides maker Monsanto, allowing the companies time to offer new information.

Environmentalists and politicians on both sides of the Atlantic fear that the deal, which would create a global seeds and pesticides behemoth with annual revenues of around 23 billion euros and 140,000 employees, would give the combined firm too much power over the food chain.

As it opened an in-depth examination of the tie-up in August, the Commission expressed concern that Bayer produces one of the few alternatives to Monsanto’s product glyphosate, the most sold non-selective herbicide in Europe.

It also noted that both firms have large market shares in vegetable seeds and several field crops where their products compete against one another.

Yesterday’s sale to BASF included Bayer’s cotton seeds, canola seeds and soybean seed activities.

The units the Leverkusen-based group plans to sell generated around 1.3 billion euros of revenue last year, Bayer said.

More than 1,800 employees are affected by the move, mostly in the US, Germany, Brazil, Canada and Belgium, with BASF agreeing to guarantee their jobs for three years after the deal is inked.

The proceeds of the sale are to go toward partially refinancing the Monsanto bid.

Bayer still hopes to close its Monsanto merger “by early 2018,” although the Commission said in August that the deadline for a decision would be pushed back from the previous date of Jan. 22 next year.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top