BAYER has agreed to sell its entire vegetable seeds business to BASF for €1.7bn (US$2bn), as it seeks to address anti-competition concerns related to its buyout of agriculture firm Monsanto.
The sale also includes the transfer of Bayer’s research platform for wheat hybrids and certain glyphosate-based herbicides in Europe that are predominantly used in industrial applications, its digital farming business, and 2,500 staff. BASF has committed to maintain all permanent positions for three years after the deal is closed.
The sale however, hinges on Bayer successfully receiving regulatory approval for its US$66bn purchase of Monsanto, which it had earlier expected to close by Q2, but has now pushed into the second half of 2018.
In August, European authorities launched an in-depth investigation on the back of concerns that Bayer’s deal with Monsanto, which would create the world’s largest integrated agribusiness company, could reduce competition in areas such as pesticides, seeds and “traits” (patented features of genetically-modified seeds).
There are concerns that the transaction would take place in industries that already have restricted competitive markets. The deal is the third such ‘mega-merger’ announced in recent years, with the antitrust authorities already having imposed conditions upon the mergers of Dow and Dupont and Syngenta and ChemChina.
BASF and Bayer announced they had entered into exclusive talks on the sale of its vegetable seeds business in March. This followed an earlier deal agreed in October last year worth around US$7bn to sell BASF its global glufosinate-ammonium herbicide business, and research and breeding capabilities for key crops such as oilseed rape, cotton and soybean.