Economy

Bayer sells units to be able to complete Monsanto takeover

Bayer sells units to be able to complete Monsanto takeover”

The transaction's subject to regulatory approvals and the successful closing of the Monsanto acquisition.

German pharmaceutical giant Bayer AG has reached a 5.9 billion euro ($7 billion) deal to sell parts of its Crop Science unit to German chemical company BASF to alleviate regulatory concerns over its planned takeover of US seed and weed-killer company Monsanto Co.

The transaction also includes Bayer's trait research and breeding capabilities for these crops and the LibertyLink trait and trademark.

The units included in the deal brought in revenues of around 1.3 billion euros in 2016, with five factories, 10 research and development sites and strong positions in staple crops like soybeans, oilseed rape and cotton, especially in the Americas. These employees are primarily located in the US, Germany, Brazil, Canada and Belgium, the company said.

"With this investment, we are seizing the opportunity to acquire highly attractive assets in key row crops and markets", Kurt Bock, the BASF chairman said. That will be the largest all-cash deal of all time if it goes through and would create a company that controls more than a quarter of the total world market for seeds and pesticides. "The acquisition will further enhance our agricultural solutions offer, which is a core pillar of BASF's portfolio".

German pharmaceutical company Bayer said that the assets to be sold include its global glufosinate-ammonium business and related LibertyLink technology for herbicide tolerance, nearly all its field-crop seeds businesses, as well as respective research-and-development capabilities.

More than 1,800 commercial, R&D, breeding and production personnel shall transfer from Bayer to BASF. "We are very grateful to our employees, who have played a key role in the success of these businesses over the years", said Baumann.

Bayer, the Leverkusen-based multinational that specializes in pharmaceuticals and chemicals, recently agreed a €56 billion takeover of USA seeds company Monsanto and the deal with BASF is part of their plan to divest themselves of assets in order to fund the Monsanto deal and improve their chances of gaining regulatory approval.

Bayer will continue to own, operate and maintain these businesses until the closing of this divestiture, according to the Bayer news release.

Bayer's acquisition of Monsanto is under review by antitrust authorities.



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