BASF to buy Bayer units for $7 billion

LONDON — German chemicals giant Bayer AGsaid Friday that it had agreed to sell parts of its crop science business toBASF SE for about $7 billion.

The deal comes as Bayer looks to pave theway for regulatory approval of its $56 billion purchase of its US rivalMonsanto Co., which it lined up last year.

European antitrust authorities opened anin-depth review of the Bayer-Monsanto agreement in August after finding thatthe concessions Bayer had offered were “insufficient” to resolve their doubtsabout the transaction.

The regulators said they would investigatewhether the deal would restrict competitors’ access to distributors and tofarmers, particularly if the two companies were to bundle sales of pesticidesand seeds. European authorities have until Jan. 8 to issue a decision.

“We are taking an active approach to address potential regulatoryconcerns, with the goal of facilitating a successful close of the Monsantotransaction,” Werner Baumann, Bayer chairman, said in a news release. “At thesame time, we are pleased that, in BASF, we have found a strong buyer for ourbusinesses that will continue to serve the needs of growers, and offer ouremployees long-term prospects.”

BASF, a German maker of chemicals and cropprotection products, said that it would pay 5.9 billion euros in cash for“significant parts” of Bayer’s seed and herbicide businesses. The units hadsales of 1.3 billion euros last year.

More than 1,800 Bayer employees in Germany,the United States, and three other countries would transfer to BASF as part ofthe transaction.

BASF said it expected its transaction toclose in the first quarter. That is contingent, however, on the Monsanto-Bayerdeal closing, and European regulators are not expected to conclude that reviewbefore January.

“With this investment, we are seizing the opportunity to acquirehighly attractive assets in key row crops and markets,” said Kurt Bock, BASFchairman. “It will be a strategic complement to BASF’s well-established andsuccessful crop protection business as well as to our own activities inbiotechnology.”

The Bayer-Monsanto combination adds torapid consolidation in the seed and agrochemical sector. In March, European authoritiesapproved, with conditions, a plan that would merge Dow Chemical Co. and DuPontand then split the combined company into three.

Less than a month later, the regulatorsapproved the acquisition of Swiss agribusiness company Syngenta AG by China NationalChemical Corp., on the condition that ChemChina sell significant portions ofits European pesticide and plant-growth business.

(This Wechat Subscription is maintained by Cccl and is complementary towww.competitionlaw.cn.We would like to share with you the information of competition law--Cccl)