BASF TO BUY BAYER SEED, HERBICIDE UNITS
But €5.9b deal conditional upon Monsanto acquisition going through
BASF has agreed to buy significant parts of Bayer’s seed and herbicide businesses for €5.9 billion (RM29.54 billion) in cash, said the two companies yesterday.
BASF, the world’s third-largest maker of crop chemicals, has so far avoided seed assets and instead pursued research into plant characteristics such as drought tolerance, which it sells or licenses out to seed breeders.
But Bayer’s US$66 billion (RM278.5 billion) deal to buy Monsanto has created opportunities for rivals to snatch up assets it must sell to satisfy competition authorities.
“With this investment, we are seizing the opportunity to acquire highly attractive assets in key row crops and markets,” said BASF chief executive Kurt Bock.
“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.”
Bayer 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 next year.
As part of the asset sale to BASF, which is conditional upon the Monsanto acquisition going through, more than 1,800 employees located primarily in the United States, Germany, Brazil, Canada and Belgium will transfer to BASF.
As part of the agreement, BASF had committed to maintaining all permanent positions, under similar conditions, for at least three years after the deal closed, said Bayer.
BASF will also acquire Bayer’s manufacturing sites for glufosinate-ammonium production and formulation in Germany, US, and Canada, seed breeding facilities in the Americas and Europe as well as trait research facilities in US and Europe. Reuters