The German group Bayer has announced that it has signed an agreement with BASF to sell the agrochemical activities for 5,9 billion euros, to facilitate the planned acquisition and merger with the American Monsanto which has come under fire from the EU Antitrust. The transaction concerns selected rapeseed and soybean crops, as well as pesticides which, in 2016, generated a turnover of 1,3 billion euros.
The transaction is subject to necessary approvals and finalization of the Monsanto acquisition, a company statement said.
To marry Monsanto, therefore, Bayer puts agrochemical activities on the table for almost 6 billion and is willing to allow the passage on the seed market to rival Basf. “We take a proactive approach to addressing any issues in order to smooth the deal with Monsanto,” Bayer chief Werner Baumann said, according to a statement.
The European Antitrust has reserved the right to make a decision by 8 January 2018, proceeding with an "in-depth investigation" to identify any limits to competition in the plant protection products and seeds sectors. In response to these fears and with the hope of closing the merger "by the beginning of 2018" Bayer has decided to sell some family jewels to rival Basf.
At an economic level, the proceeds from the sale will allow Bayer to refinance only a small portion of the 56 billion outlay for Monsanto. If the transaction is successful, Bayer will hand over to BASF the intellectual property of the products and sites in its possession, including 5 production or preparation plants and 10 research and development centres. Involved more than 1.800 employees mainly employed in the United States, Germany, Brazil, Canada and Belgium.
Less than a month ago, Bayer Crop Science had confirmed investments in agricultural research and development for this year of around 1 billion euro, announcing that 2020 new products would be placed on the markets by 15.
