BASF to Buy Bayer Units for $7 Billion
By CHAD BRAY
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LONDON — The German chemicals giant Bayer said on Friday that it had agreed to sell parts of its crop science business to BASF for about $7 billion.
European antitrust authorities opened an in-depth review of the Bayer-Monsanto agreement in August after finding that the concessions Bayer had offered were “insufficient” to resolve their doubts about the transaction.
The regulators said they would investigate whether the deal would restrict competitors’ access to distributors and to farmers, particularly if the two companies were to bundle sales of pesticides and seeds. The European authorities have until Jan. 8 to issue a decision.
“We are taking an active approach to address potential regulatory concerns, with the goal of facilitating a successful close of the Monsanto transaction,” Werner Baumann, the Bayer chairman, said in a news release. “At the same time, we are pleased that, in BASF, we have found a strong buyer for our businesses that will continue to serve the needs of growers and offer our employees long-term prospects.”
BASF, a German maker of chemicals and crop protection products, said that it would pay 5.9 billion euros in cash for “significant parts” of Bayer’s seed and herbicide businesses. The units had sales of €1.3 billion last year.
More than 1,800 Bayer employees in Germany, the United States and three other countries would transfer to BASF as part of the transaction.
BASF said it expected its transaction to close in the first quarter. That is contingent, however, on the Monsanto-Bayer deal closing, and European regulators are not expected to conclude that review before January.
“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. “It will be a strategic complement to BASF’s well-established and successful crop protection business as well as to our own activities in biotechnology.”
The Bayer-Monsanto combination adds to rapid consolidation in the seed and agrochemical sector. In March, European authorities approved, with conditions, a plan that would merge Dow Chemical and DuPont and then split the combined company into three.
Less than a month later, the regulators approved the acquisition of the Swiss agribusiness company Syngenta by the China National Chemical Corporation, on the condition that ChemChina sell significant portions of its European pesticide and plant-growth business.
Follow Chad Bray on Twitter: @Chadbray.