BASF to Buy Bayer Units for $7 Billion

Lloyd Doyle
October 13, 2017

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.

It said it would use the proceeds of the sale to partially refinance the planned acquisition of Monsanto, which it still hopes will close in early 2018.

More than 1,800 Bayer employees in Germany, the United States and three other countries would transfer to BASF as part of the transaction. "The industry business model is shifting toward chemical and seeds business being sold together".

The sale of the LibertyLink-branded seeds and Liberty herbicide businesses, which generated around 1.3 billion euros of sales in 2016, is a key part of the assets Bayer must sell. The deal will see them make major steps into the agrochemical and biotechnological markets, seen as increasingly important following several major mergers in the industry.

"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", it added.

The deal is contingent upon the completion of Bayer's acquisition of Monsanto, but the takeover still faces scrutiny from European regulators.

"We are taking an active approach to address potential regulatory concerns, with the goal of facilitating a successful close of the Monsanto transaction", said Bayer's chairman Werner Baumann. "At the same time, we are pleased that, in BASF, we have found a strong buyer for our businesses".

Other reports by Iphone Fresh

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