Bayer-Monsanto deal may face U.S. antitrust hurdles

Bayer’s plan to win antitrust approval for its takeover of Monsanto hasn’t satisfied U.S. officials who are worried the merger could hurt competition, according to two people familiar with the matter.

The Justice Department’s antitrust division doesn’t think Bayer’s proposal to sell businesses goes far enough, said the people. The government wants the German chemicals company to divest more assets to resolve its concerns, said one of the people, who asked not to be named because the investigation is confidential.

Negotiations between the two sides are continuing and a final decision by the government is probably months away, the person said. Talks have been constructive as Bayer has taken steps to address the government’s concerns, the person added.

Monsanto tumbled the most in two years on the news, and Bayer erased most of its gains for the day. Representatives for Bayer, Monsanto and the Justice Department declined to comment.

Bayer’s $66 billion takeover of St. Louis-based Monsanto is part of a wave of consolidation that has swept seed and crop-chemical firms. The companies are seeking approval from U.S. and European officials after two previous deals — the combination of Dow Chemical Co. and DuPont Co. and China National Chemical Corp.’s takeover of Syngenta — won antitrust clearance.

Bayer, which is based in Leverkusen, Germany, has agreed to sell seed-and-agrochemical assets to BASF for $7 billion. BASF is also in talks to buy Bayer’s vegetable seed business. BASF is viewed by U.S. officials as a good buyer that can compete effectively in the business, one of the people said.

Monsanto shares fell as much