German drug and agrochemicals major Bayer today announced sale of selected crop science businesses to BASF for Dollars 7 billion as part of its strategy to complete acquisition of USA biotech major Monsanto.
"The assets to be sold include Bayer's global glufosinate-ammonium business and the related LibertyLink™ technology for herbicide tolerance, essentially all of the company's field crop seeds businesses, as well as respective research and development capabilities", Bayer said.
"We are taking an active approach to addressing potential regulatory concerns, with the goal of facilitating a successful close of the Monsanto transaction", Bayer chief executive Werner Baumann said in a statement.
In addition, one specific detail the Commission is concerned about, is that Bayer now makes one of the only popular alternatives to one of Monsanto's herbicide products.
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 United States seeds and pesticides maker Monsanto, allowing the companies time to offer new information.
Proceeds from the sale will go towards refinancing the Monsanto bid.
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The acquisition complements BASF's crop protection business, strengthening the company's herbicide portfolio and marking its entry into the seed business with proprietary assets in key agricultural markets.
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 January 22 next year.
"The Commission takes note of this announcement".
The Bayer businesses bought by BASF recorded sales of roughly 1.3 billion euros in 2016 and employed 1,800 staff. BASF voiced confidence that the all-cash transaction could be completed by the first quarter of 2017 if Bayer's acquisition of Monsanto is approved. "As part of the agreement, BASF has committed to maintain all permanent positions, under similar conditions, for at least three years after closing of the transaction".
With this acquisition, we are seizing the opportunity to purchase highly attractive assets in key row crops and markets. Bayer shares were trading over 1% higher mid-morning, while BASF shares were a little lower.
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